Gary Black Boosts Tesla Price Target By 27% To $380 Based On 'Increased Conviction' That Elon Musk-Led Company Will Launch $25K Hatchback

Tesla Inc. TSLA could see significant growth from a new budget electric vehicle offering, according to prominent investor Gary Black, who raised his price target for the EV maker by 27% to $380 from $300 on Monday.

What Happened: Black, Managing Partner at The Future Fund LLC, attributes his “increased conviction” to expectations that Tesla will launch a $25,000-$30,000 hatchback model, potentially capturing approximately 15% of the global compact car market.

His revised earnings estimates surpass Wall Street consensus, projecting adjusted earnings per share of $3.80 for 2025 and $17.00 by 2030.

The investment thesis comes amid Black’s recent portfolio adjustments. In November, his fund trimmed its Tesla position at $351 after the stock surged 150% from April lows. The Future Fund’s Tesla investment strategy has proved profitable, with an average purchase price of $162 and a selling price of $252 since early 2023.

Tesla ranks among the top five positions for The Future Fund Active ETF FFND.

Raising my $TSLA price target to $380 from $300, based on increased conviction that TSLA will launch a $25K-$30K hatchback that vaults TSLA into the global compact category (~15% global share). I have increased my TSLA Adj EPS as follows:
– 2025 $3.80 from $3.60 (WS $3.29)
-… pic.twitter.com/EInUAo0VOZ
— Gary Black (@garyblack00) December 9, 2024

$TSLA Summary – 12/09/2024

Upside:
1/ EV adoption +20%-25% per yr
2/ Fed cuts rate by another 25bp by Y.E.
3/ Higher FSD take rates/licensing deal
4/ Trump streamlines process for securing autonomous driving licenses nationally
5/ $25K-$30K Model Q Compact launch FY'25 1H…
— Gary Black (@garyblack00) December 9, 2024

What Happened: Black identified several potential catalysts for Tesla, including continued EV adoption growth of 20-25% annually, increased Full Self-Driving adoption, and possible autonomous driving license streamlining under President-elect Donald Trump‘s administration.

However, he also noted key risks, including the potential elimination of the $7,500 EV tax credit and regulatory challenges for autonomous driving features.

The revised target reflects Black’s confidence in Tesla’s long-term growth, using a PEG ratio of 1.75x and projected long-term EPS growth of 25%. Despite his optimistic outlook, Black recently expressed caution about Tesla’s current valuation, noting that the stock’s 50% rise since November’s election has been driven primarily by P/E expansion rather than earnings estimate revisions.

Price Action: Tesla closed at $389.79 on Monday, up 0.15% for the day. In after-hours trading, the stock rose further to $392.35, gaining an additional 0.66%. Year to date, Tesla shares have surged by 56.91%.

According to data from Benzinga Pro, Tesla has a consensus price target of $251.06 from 34 analysts, ranging from a high of $411 to a low of $24.86. The latest ratings from Deutsche Bank, Guggenheim, and BofA Securities average $315, implying a 19.71% downside.