- On Wednesday, Bank of America Tesla The stock price goes from $350 to $550, which means it could rise by about 16% from Monday’s closing price.
- Tesla Announcement Tuesday It plans to sell up to $5 billion of new shares. Take advantage of the latest rally.
- The announcement states that “TSLA will leverage its shares to further solidify its position as a dominant EV car manufacturer to raise capital through low-cost share offerings to accelerate aggressive capacity expansion plans worldwide and significantly increase units/revenues. It was proof of our claim that “John Murphy’s analysts wrote in the memo.
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Tesla According to Bank of America, the stock is expected to rise even further over the next 12 months following a $5 billion public offering.
The company raised Tesla’s target price on Wednesday from $350 to $550, which means it could be up about 16% from Monday’s closing price. Tesla Announcement Tuesday Plans to sell new shares of up to $5 billion, Take advantage of the recent rally.
“From our point of view, yesterday’s announcement would further solidify the company’s position as TSLA leveraged its shares to raise capital through low-cost share offerings to accelerate aggressive capacity expansion plans and significantly increase units/revenues worldwide. It was proof of our claim that it would be the dominant EV car manufacturer,” wrote analysts headed by John Murphy in the memo.
Tesla shares fell up to 8% in intraday trading on Wednesday.
The new pricing target is because the Bank of America has moved on to “reduce valuations based on the theoretical growth opportunities granted to TSLA,” Murphy said. Bank of America has reaffirmed its “neutral” rating for auto company shares.
Bank of America sees Tesla as using higher stock prices to raise more money through stock sales, which increases the amount of cash reserves it can use to boost future earnings growth.
Murphy said, “It’s important to recognize that the higher the rising spiral of TSLA stocks, the cheaper capital will be the growth fund and investors will be rewarded with higher share prices.” “The opposite of this dynamism is also true, and it is this self-actualizing framework that accounts for the extreme moves towards the rise and fall of TSLA stocks.”
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Tesla’s “high growth isn’t necessarily self-funding,” Murphy said, but as long as the company has access to abundant low-cost capital, it doesn’t have to.
“In short, TSLA is a new disruptive (automotive) company that may or may not be dominant in the long run, but it doesn’t matter as long as it can fund massive growth while driving capacity expansion with little cost capital.” He said.
Tesla is roughly 435% so far.