Tesla (NASDAQ: TSLA) stock jumped 5% in intraday trading Thursday following an upgrade from Bank of America.
Bank of America analysts have shifted their stance on Tesla (TSLA) stock, upgrading its rating from “neutral” to “buy” while keeping the price target steady at $220. The decision comes a day after Tesla released its first-quarter earnings report, which received a positive market response.
The firm’s analysts highlighted several factors that contributed to their decision, including better-than-expected first-quarter results and management commentary that addressed key concerns.
One significant aspect of Tesla’s earnings report was the reaffirmation of its commitment to producing more affordable consumer models and its continued focus on diversifying revenue streams beyond the Robotaxi concept. This clarification alleviated investor worries about Tesla’s dependence on a single future technology and signaled a broader strategy for sustainable growth.
Bank of America analysts emphasized that Tesla’s first-quarter results beat expectations, providing a boost to the company’s growth narrative. The report effectively addressed recent negative catalysts, including concerns about slow volume growth, thin margins, launch issues, layoffs, and high inventories, thus restoring investor confidence in Tesla’s trajectory.
Bank of America also spotlighted several positive catalysts propelling Tesla’s outlook, including accelerated production plans, the imminent unveiling of the Robotaxi concept in August, cost-saving initiatives, and potential licensing opportunities.
In a statement, Bank of America analysts acknowledged that while these developments might not fundamentally alter Tesla’s long-term trajectory, the current tide of news flow suggests a more favorable risk profile for the stock in the near term.
The analysts remarked,
“Admittedly, the combination of all of these may not structurally change the long-term path of the company, but in the near-term, the tide in news flow appears to suggest the risk to the stock is skewing more positively.”
Tesla (NASDAQ: TSLA) Stock Price Action
At the time of this report, TSLA stock stands at $170.18, indicating a 4.97% increase from the previous trading session. This week, it has surged in value by 13.51%. Trading activity has seen 125,147,202 (125.14 million) shares change hands, higher than the average daily volume of 102.19 million.
