Deutsche Bank has resumed coverage of Tesla with a buy rating, naming it a top pick.
TakeAway Points:
- With a buy rating and a $295 price target, Deutsche Bank has resumed coverage of Tesla (TSLA), highlighting the company’s potential as a platform for technology.
- Redburn Atlantic noted limited upside potential in its downgrading of Costco (COST), despite increasing the price target to $890.
- JPMorgan reiterates its overweight rating on Apple (AAPL), while Jefferies upgrades Exlservice Holdings (EXLS) to buy. These are two more noteworthy analyst comments.
- UBS upgraded Janus Henderson to neutral from sell, noting that management’s new vision is starting to show early signs of success.
Tesla’s growth
Deutsche Bank has resumed coverage of Tesla with a buy rating, naming it a top pick. Analyst Edison Yu set a price target of $295, implying a 36% upside. Yu emphasized that Tesla should not be viewed merely as an automaker but as a technology platform aiming to reshape multiple industries.
“At the core, we do not see Tesla as an automaker but rather a technology platform attempting to reshape multiple industries, deserving of a unique type of valuation framework,” Yu wrote.
He acknowledged that while automotive deliveries and margins have been softer recently, this is seen as temporary ahead of new models and refreshes. Long-term, Tesla is viewed as an emerging leader in autonomous driving and humanoid robots, with its robotaxi and Optimus projects representing lucrative applications of end-to-end AI. Tesla shares have declined nearly 13% year to date but have surged 24% over the past three months.
Costco reduction
Redburn Atlantic has downgraded Costco to neutral from buy, despite increasing the price target to $890 per share from $860. Analyst Daniela Nedialkova noted that the new price target implies only a 1.5% upside from Monday’s close. While Costco is recognized as a “high-quality growth compounder” due to its differentiated business model and growing membership base, Nedialkova believes that the upside catalysts for this year have largely been priced in.
“While ongoing comp/market share gains should continue to drive decent earnings growth (c10% pa), the current risk-reward profile is skewing less favourably given the even higher than normal expectations priced into a starting point of 50x P/E on FY25,” she wrote.
Shares of Costco have surged nearly 36% year to date.
Call for a wider market analyst
Several other notable analyst calls were made on Monday. JPMorgan reiterated its overweight rating on Apple, highlighting the upcoming iPhone event and potential new features. Morgan Stanley downgraded Church & Dwight to equal weight from overweight, citing that the stock’s thesis has already played out.
Deutsche Bank downgraded Colgate-Palmolive to hold from buy, stating that the stock’s upside is already priced in. UBS upgraded Janus Henderson to neutral from sell, noting that management’s new vision is starting to show early signs of success. Jefferies upgraded Exlservice Holdings to buy from Hold, identifying it as an AI beneficiary. Citi upgraded MarineMax to buy from neutral, calling it a strong play in a Fed pivot. JPMorgan initiated coverage of Wave Life Sciences with an overweight rating, citing the biotech company’s strong positioning.
