Tesla Price Target Raised To $900 From $500 At BofA

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BofA analyst John Murphy raised the firm's price target on Tesla (TSLA) to $900 from $500 and keeps a Neutral rating on the shares.

The stock is "driven by growth afforded by valuation," said Murphy, who has tried to estimate what the current stock price affords to Tesla in terms of incremental plants and units and what those incremental units translate into in incremental revenue and profits.

Building automotive industry capacity is expensive and often generates low returns, but "the higher the upward spiral of Tesla's stock goes, the cheaper capital becomes to fund growth, which is then rewarded by investors with a higher stock price," argues Murphy.

Disclaimer: TheFly's news is intended for informational purposes only and does not claim to be actionable for investment decisions. Read more at  more

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