Bank of America Downgrades Tesla Stock Recommendation, Raises Price Target Due to 'High Application Risk'

In a note sent to clients, Bank of America analyst John Murphy claimed that much of the rise of electric vehicle manufacturer Tesla had been recognized since the company increased its shares last April, thereby downgrading his rating on Tesla from "Buy" to "Neutral." Since then, Tesla's shares have risen by over 60%, but much of this increase occurred after President Trump's election victory in November.

Murphy, however, raised his price target from $400 to $490, while also issuing some warnings. He wrote, "While this still implies upside, the execution risk is high, and TSLA is trading at a level that captures much of the long-term potential of our core scenario coming from traditional vehicles, robotaxi, Optimus, and energy production and storage."