Chicago, IL – December 26, 2024 – Zacks Investment Ideas feature today’s highlights: General Motors (GM), Ford (F), and Tesla (TSLA). Among these, Tesla has been the standout performer, leaving investors pondering whether to jump on the bandwagon as the new year approaches.
Tesla’s Impressive 2024 Performance
Tesla shares have surged +25% in December alone and are up over +75% year-to-date, significantly outperforming broader indexes and auto peers like General Motors and Ford. This remarkable rally has raised questions among investors: Should Tesla have a place in their portfolios for 2025?
Why Investor Sentiment is High for Tesla
The bullish sentiment surrounding Tesla stems from several factors:
- Autonomous Vehicle Advancements
Tesla’s long-term plans, such as expanding its Full Self-Driving (FSD) capabilities and rolling out robotaxis, have kept analysts optimistic. These initiatives reinforce Tesla’s reputation as a leader in innovation within the electric vehicle (EV) space. - Governmental Support Under the Trump Administration
The re-election of Donald Trump and his appointment of Tesla CEO Elon Musk as co-leader of the new Department of Government Efficiency (DOGE) have further fueled investor confidence. Although Musk is not a cabinet member, the administration’s pro-EV deregulation policies are expected to favor Tesla’s operations and growth.
Tesla’s Growth Trajectory
Tesla’s growth projections remain strong:
- Revenue Growth:
Tesla’s total sales are forecasted to rise 3% in fiscal 2024, followed by a projected 17% jump in FY25, reaching $117.58 billion. - Earnings Outlook:
While 2024 earnings per share (EPS) are expected to decline to $2.47 from $3.12 in 2023, a robust rebound is anticipated in FY25, with EPS projected to soar 32% to $3.26.
Positive EPS Revisions
Adding to the positive outlook, Zacks reports that Tesla’s EPS estimates for FY24 and FY25 have seen upward revisions of 10% and 8%, respectively, over the last 60 days. This trend indicates growing confidence in Tesla’s ability to deliver on its financial targets.
Tesla Stock: A Strong Buy
Tesla currently holds a Zacks Rank #1 (Strong Buy) due to its positive earnings estimate revisions and the anticipated regulatory support under the Trump administration. These factors suggest Tesla remains a strong contender for investment as we head into 2025.
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Bottom Line
Tesla’s innovations in autonomous vehicles, government-backed growth opportunities, and strong financial projections make it an attractive option for investors. However, with its impressive rally, potential buyers should carefully assess their long-term investment strategy.
