Wall Street analyst updates Tesla stock price after Musk's $1 trillion package approval

Core Viewpoint - Tesla's stock outlook has been updated following the approval of CEO Elon Musk's $1 trillion pay package, with a 'Hold' rating and a price target of $406 per share, indicating a potential 7% downside from the current trading level of about $439 [1][4]. Group 1: CEO Compensation and Its Implications - Shareholder approval of Musk's compensation plan alleviates a significant uncertainty regarding the company's leadership [3]. - Musk's pay package is performance-based, contingent on achieving ambitious milestones, including market capitalization targets ranging from $2 trillion to $8.5 trillion, production of 20 million vehicles, and 1 million robotaxis and humanoid "Optimus" bots [5][6]. - The new pay plan builds on Musk's previous $56 billion package, which faced legal challenges but was ultimately reinstated by shareholders [6]. Group 2: AI and Technology Development - Tesla's ambitious AI projects, including Full Self-Driving (FSD), robotaxis, and the Optimus robot, are still in early development and are years away from generating significant revenue [3][4]. - While progress is noted in Tesla's FSD system, it is not meeting expectations, and there are ongoing execution risks in scaling AI-driven technologies [4]. Group 3: Market Sentiment and Analyst Ratings - Wall Street analysts maintain a consensus 'Hold' rating for Tesla, with 34 analysts tracked by TipRanks, including 14 'Buy', 10 'Hold', and 10 'Sell' recommendations [7]. - The average 12-month price target is $382.54, suggesting a 12.98% downside from the recent closing price of $439.62 [7]. - Price targets among analysts vary significantly, ranging from a high of $600 to a low of $19.05, indicating differing views on Tesla's near-term trajectory [8].