Barclays Raises Tesla Price Target to $350 Ahead of Q3 Earnings

Barclays analyst Dan Levy has raised Tesla's price target from $275 to $350, maintaining an 'Equal Weight' rating ahead of the company's third-quarter earnings report. Levy highlighted two contrasting narratives influencing Tesla's outlook: the accelerating autonomous vehicle and artificial intelligence initiatives, bolstered by CEO Elon Musk's proposed compensation package, and a weakening fundamental backdrop with third-quarter deliveries widely expected to be peak volumes for some time.

Levy noted that the recent stock surge of over 30% since early September is driven more by the broader AV/AI narrative than near-term fundamentals. He cautioned that while the autonomous and AI opportunities are central to Tesla's story, the commercialization timeframe remains uncertain.

Despite the positive momentum, Levy expressed a 'neutral to slightly negative' stance heading into the earnings call, suggesting that any mention of weaker near- or mid-term fundamentals beyond the third quarter could weigh on the stock. He also mentioned that any weakness might be short-lived, as further excitement could build leading up to the November 6 Annual General Meeting, expected to reinforce Tesla's future growth narrative.

Levy's assessment aligns with the broader market consensus, which holds a 'Hold' rating for Tesla, based on a mix of 16 'Buy,' 13 'Hold,' and 10 'Sell' recommendations. The average price target of $366.35 suggests a potential 12-month decline of approximately 17%.