Tesla Motors, Inc. (NASDAQ: TSLA) – BofA Upgrades Tesla, double price target; Says Growth Story Could ‘Carry The Day’

With stocks rising 600% in the past year, another Wall Street bear threw in the towel Tesla Inc (NASDAQ: TSLA) on Friday.

The Tesla Analyst: Bank of America analyst John Murphy upgraded Tesla from Underperform to Neutral and raised its price target from $ 800 to $ 1,750.

The Tesla dissertation: Murphy said he is still skeptical about Tesla’s foundations in the long run, but the forward growth story has received a huge boost due to its low – cost access to capital. Murphy said Tesla is experiencing a self-fulfilling capital spiral in which momentum in Tesla’s share price creates an opportunity to increase cheaper capital that drives Tesla’s share price higher.

“While we remain skeptical that TSLA will be the dominant EV carmaker in the long run, if a large global footprint can be built with no cost capital, the ‘growth’ story would lead the day before the stock market,” Murphy said in the note.

See also: Morgan Stanley goes all-in on Tesla battery day, upgrading stock

Murphy said Tesla’s unrestricted access to capital should pave the way for Tesla to reduce its revenue growth to 50% annually over the next five years. However, he said that Tesla’s track record of growth and profitability up to this point is “uninspiring” because after 17 years of operation, the company has not reached 500,000 units of sales per year.

Murphy is projecting $ 11 in EPS for Tesla in 2020, and $ 13.50 in EPS in 2021.

He said, given the current interest rate climate and Tesla’s skyrocketing share price, the company should have no problem implementing further stock increases to fund its growth investments in the coming years.

Benzinga’s Take: With concerns about funding seemingly eliminated, Tesla has no excuse for failing to meet its growth goals. Tesla hopes to produce 500,000 cars by 2020, two years behind its original goal.

Tesla’s stock traded around $ 1,650 at the time of publication.