5 Most Promising Car Stocks According to Analysts

1. Tesla, Inc. (NASDAQ:TSLA)

Number of Hedge Fund Holders: 91

One-year Average Price Estimate: $196.67

Despite short-term headwinds and volatility, Tesla, Inc. (NASDAQ:TSLA) remains one of the most promising car stocks according to analysts. According to CNN Business data, Tesla, Inc. (NASDAQ:TSLA)’s median price target for one year compiled based on price estimates of 36 analysts is $210.00, with a high estimate going to $320. Cathie Wood, one of the biggest Tesla, Inc. (NASDAQ:TSLA) bulls, thinks Tesla stock could hit $500 by 2026. According to Yahoo Finance, Tesla, Inc. (NASDAQ:TSLA)’s one-year price target is $196.67, which still shows a decent upside potential from the current levels.

Morgan Stanley’s analyst Adam Jonas recently pointed to a promising new opportunity for Tesla, Inc. (NASDAQ:TSLA): heat pumps. Tesla, Inc. (NASDAQ:TSLA) has already indicated its interests in developing heating devices for homes. Jonas believes with Powerwall and SolarCity, Tesla, Inc. (NASDAQ:TSLA) already has presence in the relevant industry which it could use to boost its heat pumps business.

At the end of the fourth quarter of 2022, 91 hedge funds reported having stakes in Tesla, Inc. (NASDAQ:TSLA), up from 88 hedge funds in the previous quarter.

ClearBridge Large Cap Growth Strategy made the following comment about Tesla, Inc. (NASDAQ:TSLA) in its Q4 2022 investor letter:

“Tesla, Inc. (NASDAQ:TSLA), meanwhile, also fits squarely within our earnings reset group. We took advantage of its enterprise multiple falling back to historic lows to initiate a starter position in the leading manufacturer of electric vehicles (EV) and developer of battery technologies. Tesla has a significant structural cost advantage in battery production, EV manufacturing and EV selling, which gives it industry-leading operating margins in EVs. As the auto cycle has softened, the stock has sold off substantially with the rest of the automakers, despite EVs continuing to have a secular growth advantage. Tesla has a clean balance sheet with negative net debt and enormous revenue growth, EBITDA growth and free cash flow generation. Its margin buffer also gives the company the ability to cut prices while still protecting earnings better than competitors, which should help support continued volume growth. There is also significant upside optionality driven by its software offerings, which we do not believe is currently priced into the stock.

That being said, Tesla is highly indexed to a flagging auto market and we expect its earnings outlook to worsen in the near term. We are also monitoring increasing EV competition and the recently emerging risks to the brand and management integrity raised by CEO Elon Musk’s actions at Twitter to determine future position size in the portfolio.”

You can also take a peek at 12 Small Cap Stocks with Insider Buying and 12 Best EV Stocks To Buy For 2023.