RBC Capital Reiterates $500 Price Target on Tesla

RBC Capital analyst Tom Narayan reiterated on January 29, 2025, a $500 price target on Tesla, with an ‘Outperform’ rating on the stock.

“For Tesla bulls, the capex step up is expected and will facilitate the company’s path towards innovation.

The robotaxi launch schedule is a welcome detail for investors keen on concrete timetables.

Finally, while Tesla is focused on its humanoid path, we could envision a scenario where the company could make a strategic pivot to specialized form factors to satisfy demand.

The big announcement was that capex will increase significantly from ~$9B in 2025 to $20B+ in ’26 and stay at an elevated level for a period.

This will be spent on 6 factories starting production this year, more compute for Optimus training, and expanding capacity at existing factories.

Tesla will use its $44B of cash on hand to fund this but also borrow from banks especially given the recurring nature of cash flows coming from businesses like robotaxi.”

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