Deutsche Bank analyst Edison Yu praised electric vehicle maker Tesla Inc (TSLA  ) for its potential to reshape several sectors including robotaxis ahead of its highly anticipated Robotaxi Day on Oct. 10.

The Tesla Analyst: Yu reinstated coverage of Tesla with a Buy rating and $295 price target.

Deutsche Bank recently resumed coverage of the automotive sector. Previous Deutsche Bank analyst Emmanuel Rosner had last rated Tesla Hold in April with a $136 price target. Rosner now works at Wolfe Research.

The Tesla Takeaways: Tesla is advantageous when it comes to autonomous driving. The Austin, Texas-based company is also making progress in its humanoid robotics efforts, Yu said Tuesday.

"At the core, we do not see Tesla as an automaker but rather a technology platform attempting to reshape multiple industries, deserving of a unique type of valuation framework," Yu said.

Tesla enjoys a big lead in battery-powered electric vehicles thanks to its scale and costs, Yu says. The analyst views weakness on deliveries and margins as a temporary setback. New models and refreshes are coming soon.

"Long term, Tesla is an emerging leader in autonomous driving and humanoid robots, in our view, which represent some of the most clear+lucrative applications of end-to-end AI,"

Tesla Energy is also viewed as a "major growth" story with strong margins for the analyst.

Tesla's Robotaxi Day marks a major catalyst for the company, Yu noted, citing the rotobaxi unveiling and the potential for a lower-cost model being introduced.

"While many companies seemingly struggle to identify tangible applications for AI, we think Tesla will increasingly get credit as one of the leaders in end-to-end AI as this is the foundation for autonomous driving."

Yu said Tesla could recognize higher future revenue streams from OEM licensing of FSD and a hybrid robotaxi network. The Optimus humanoid robot could help with a labor mismatch and shortage in the U.S. and Europe and for unfavorable demographic trends in Asia.

Here is Yu's sum-of-the-parts valuation for Tesla:

  • Automotive: $195 per share
  • Energy: $53 per share
  • Humanoid Robot: $22 per share
  • Robotaxi: $24 per share
  • Service/other: $1 per share
  • Total: $295 per share
The analyst said Tesla has four "mega-trend" business units with auto, energy storage, humanoid robots and robotaxis.

TSLA Price Action: Tesla stock is up 0.15%, trading at $224.35 per share at last check Wednesday versus a 52-week trading range of $138.80 to $278.97. Tesla stock is down 10% year-to-date in 2024.