Bank of America analyst John Murphy has downgraded Tesla stock (NASDAQ:TSLA) from a “Buy” to a “Neutral” rating.
The analyst, however, also raised his price target for TSLA shares from $400 to $490 per share.
Tesla’s post-election rally and Q4 results:
- As noted in a report from The Street, TSLA shares have seen a notable rise since Donald Trump secured his win in the 2024 U.S. presidential elections.
- While TSLA shares already had momentum then from the company’s Q3 results, Trump’s win helped push a 60% surge in the company’s stock from the November elections to the end of 2024.
- Tesla’s Q4 and FY 2024 vehicle delivery results were weaker than expected, with the company posting an overall annual sales decline.
- On the flip side, Tesla Energy had a blockbuster year by deploying a record 11 GWh of energy storage in Q4 and 31.4 GWh of energy storage in FY 2024.
$TSLA PT Trends On Street In Recent Days.
✅ Today) BofA : Raises PT to $400 from $490
(Buy to Neutral)– Stifel Adjusts : Raises PT to $492 From $411
– Canaccord Genuity : Raises PT to $404 from $298
– Mizuho Securities : Raises PT to $515 from $230
– Dan Ives : Raises PT to… pic.twitter.com/WHgDIWnGuw— Tsla Chan (@Tslachan) January 7, 2025
Bank of America’s take:
- While Murphy noted that Tesla may see improved investor sentiment, he highlighted that there are some execution risks for the company this year.
- Following are Murphy’s comments:
- “We downgrade TSLA from Buy to Neutral. Since our upgrade in April 2024, news flow and investor sentiment have shifted more positively. Catalysts around future growth drivers have been more fully recognized (most notably for Robotaxi). Our latest valuation analysis drives our PO to $490 PO (was $400). While this still implies upside, execution risk is high and TSLA is trading at a level that captures much of our base case LT potential from core autos, robotaxi, Optimus, and energy generation & storage. We move to Neutral.
- In this report, we also update estimates to reflect our latest analysis of TSLA’s different businesses. There are catalysts ahead, which could support the stock. However, execution risk is high, supporting our Neutral rating. These include: 1) Introduction of a low cost model in 1H:25 and another new model in 2H:25 (key drivers of volume growth); 2) Launch of robotaxi in mid-2025; 3) Megapack production ramp at Shanghai assembly plant starting in 1Q:25; 4) Updates on FSD subscribers; 5) Start of broader production of Optimus, with target of 1,000 units by end of 2025; 6) Risk of new policy being less favorable for TSLA than expected; 7) A capital raise – positive as it would help accelerate growth.”
Don’t hesitate to contact us with news tips. Just send a message to simon@teslarati.com to give us a heads up.
