CFRA hikes Tesla target, reiterates Buy on tax credit outlook

CFRA raised its target price on Tesla Inc (NASDAQ:TSLA ) and reiterated its Buy rating on the stock, stating that earnings were likely to benefit further from the cancellation of Federal tax credits for electric vehicle makers. 

CFRA raised its target price to $560 from $450, and reiterated its Buy rating on the stock. The new target represents an upside of over 16% from Tesla’s Tuesday close. 

The brokerage also hiked its 2025 EPS estimates to $3.10 from $3.0 and to $4.0 from $3.75 for 2026, stating that the expected cancellation of federal EV tax credits would disproportionately impact Tesla’s competitors. 

This in turn would benefit Tesla’s revenue generation through the sale of regulatory credits, such as those under California’s Zero-Emission Vehicle program. These credits have been a major earnings driver for Tesla in the past. 

Tuesday’s target raise is CFRA’s second such move in a week, and comes as Tesla’s valuation spiked sharply over the past month, after Donald Trump’s victory in the 2024 presidential elections.

Tesla CEO Elon Musk is seen having an increasingly influential role in the upcoming Trump administration, which is expected to help fast-track regulatory approval for Tesla’s autonomous driving ambitions. 

Trump is planning to kill the tax credit for EV vehicles.

Source: Investing.com