Tesla gets price target boost but sell rating maintains, citing momentum for recent surge

Tesla (NASDAQ: TSLA) received a price target boost from UBS while its sell rating on shares remained unchanged. Analysts at the firm cited momentum and “animal spirits” for Tesla’s recent surge on Wall Street.

They don’t expect it to go on for eternity.

UBS Group AG analysts, a team led by Joseph Spak, said Tesla’s current run on the market, which has seen explode to nearly 30 percent so far this month, has been “driven by animal spirits/momentum,” in a new report sent to investors this week.

Bloomberg initially reported on the note.

Spak wrote in the report that Tesla is riding the wave set off by the successful election campaign of President-elect Donald Trump, an ally of Elon Musk, who recently put the Tesla CEO in charge of the Department of Government Efficiency (DOGE).

Tesla shares have seen an over 20 percent boost in value since the morning after Trump was named the President-elect.

Spak and UBS have a ‘Sell’ rating on Tesla shares and their price target is now $226, up from $197.

Interestingly, despite Trump’s drastically different outlook on electric vehicles than the Biden Administration, many believe Tesla will benefit from the President-elect, who plans to penalize companies who do not build and employ domestically with tariffs.

Things became more complicated when it was recently revealed that President-elect Trump plans to axe the $7,500 federal EV tax credit, something that has helped EVs appeal to consumers.

Tesla stands to be impacted just like other automakers due to the plan to get rid of the credit. However, analysts do not believe Tesla will feel any negatives from this. Instead, bulls like Wedbush’s Dan Ives think that the tax credit removal will actually impact Detroit-based automakers and EV companies with fewer sales more negatively than Tesla:

“This EV tax credit removal could clearly slow down Detroit’s shift to EVs over the next few years but we continue to believe GM is well positioned on both its ICE vehicles as well as its EV lineup. Rivian has continued to battle supply chain headwinds and while the EV tax credit removal would be a negative for its business, overall given the high price of its core vehicles we do not see this moving the needle significantly on the demand front.”

Ives continued:

“In line with our thoughts over the past few weeks Tesla has a scale and scope that is unmatched and while losing the EV tax credit could also hurt some demand on the margins in the US, this will enable Tesla to further fend off competition from Detroit as pricing/scale/scope is an apples to oranges when compared to the rest of the auto industry once the EV tax credit disappears.”

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