Exane BNP Paribas Starts Tesla (TSLA) at Underperform With $307 Price Target

Core Viewpoint - Tesla's stock is under scrutiny due to its high valuation, which analysts believe cannot be justified based on current revenue and cash flow projections [1][2][3]. Valuation Concerns - Exane BNP Paribas initiated coverage on Tesla with an "Underperform" rating and a price target of $307.00, citing an inability to justify the stock's valuation [1]. - The valuation model includes Tesla's AI ventures, such as Robotaxi and Optimus, which currently generate no revenue but account for approximately 75% of the estimated $1.02 trillion price target [2]. - Projected cash flow for 2026 is expected to be $4 billion below consensus estimates, influenced by margin pressures and challenges in AI/software [2]. AI Potential - Despite the valuation concerns, there is optimism regarding Tesla's AI future, with analysts suggesting that the company could achieve significant milestones related to Elon Musk's 2035 targets [3]. - Tesla is recognized as a leader in leveraging advanced AI for autonomous driving and robotics, which could enhance its long-term growth prospects [3]. Comparative Analysis - While Tesla shows potential as an investment, analysts believe that other AI stocks may offer better upside potential with less downside risk [4].