Bank of America: Tesla's Stock in Need of 'Meaningful Reality Check'

The most bearish Tesla Motors Inc TSLA analysts on Wall Street are out with a harsh rebuke of the company's stationary storage opportunity, and the stock's most-recent move higher. The analysts have a $65 price target on the stock – which would equate to a 72 percent decline.

First, Bank of America argued that stationary storage is nothing new. In fact, "Tesla's current battery supplier, Panasonic, has been involved in stationary storage for a number of years, with limited success." The analysts pegged Panasonic's storage margins at 1 to 2 percent, "despite the company's global scale and experience." Additionally, other lithium ion battery companies, home generator companies and large industrial companies all have energy storage solutions.

The "lofty profit margins" that support this week's 5.5 percent move higher "appear very optimistic," the analysts added.

Bank of America concluded that "a meaningful opportunity appears to be many years off, will bee fraught with competition, and is destined to be far less profitable than even the company's existing operations." Therefore, the "potential stationary storage opportunity for Tesla [is] limited."

The analysts also said that this announcement is conspicuously timed to "shift investor attention away from a struggling core auto business." In the company's May 6 earnings announcement, Bank of America expects "significant operating loss and substantial cash burn," all of which can weigh on the stock.

Tesla is trading flat on Tuesday's session ahead of Thursday's announcement. This year, the stock has added 4.6 percent, all of those gains coming this week.