Bank of America Downgrades Tesla Shares, Raises Price Target Citing 'High Application Risk'

In a note to clients, Bank of America analyst John Murphy downgraded his recommendation on Tesla from "Buy" to "Neutral," claiming that much of the electric vehicle manufacturer's rise has already been recognized since it raised its stock in April of last year. Since then, Tesla shares have increased by over 60%, but much of this increase came after President Trump's election victory in November.

Murphy, however, raised his price target from $400 to $490 but noted some warnings. He stated, "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 from core vehicles, robotaxis, Optimus, and energy production and storage."