BofA Raises Tesla Price Target Following Stock Rally

Tesla Inc. TSLA reported deliveries of 180,750 units for the fourth quarter of 2020, ahead of the Street estimates, and announced an equity distribution agreement to sell common stock worth up to $5 billion through an “at the market” offering program.

The Tesla Analyst: John Murphy maintained a Neutral rating for Tesla, while raising the price target from $500 to $900.

The Tesla Thesis: The company’s fourth-quarter deliveries took the annual figure close to the target of 500,000 units in 2020, Murphy said.

Tesla’s latest capital raise follows “a similar offering in September, both of which were consistent with our thesis that TSLA will utilize its stock to raise capital through low-cost equity offerings in order to accelerate aggressive capacity buildout plans globally and drive units/revenue substantially higher, further cementing its status as the dominant EV automaker,” the analyst wrote in a note.

“It is important to recognize that the higher the upward spiral of TSLA’s stock goes, the cheaper capital becomes to fund growth, which is then rewarded by investors with a higher stock price,” he added.

TSLA Price Action: Shares of Tesla had declined by 4.8% to $837.36 at the time of publication Monday.

Click here to check out Benzinga’s EV Hub for the latest electric vehicles news.