- Bank of America raised it on Wednesday Tesla The price target ranges from $ 350 to 50 550, up nearly 16% from Monday’s close.
- Tesla made the announcement on Tuesday The new stock is planned to sell for up to 5 billion, Investing in his latest rally.
- The announcement was “evidence of our thesis that TSLA will use its stock to raise capital through low-cost equity ing fur, further cementing its position as a dominant EV automaker, to accelerate global aggressive capacity building plans and drive units / revenue significantly higher.” Analysts led by John Murphy wrote in a note.
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Tesla According to Bank of America, the stock will rise even higher in the next 12 months after its proposed $ 5 billion equity offering.
On Wednesday, the payroll firm raised its Tesla price target from $ 350 to 50 550, a close of about 16% on Monday. Tesla made the announcement on Tuesday The new shares are planned to sell for up to 5 billion, The capitalization of its most recent rally
“In our view, yesterday’s announcement is a testament to our thesis that TSLA will use its stock through low-cost equity ingings fringes to accelerate aggressive capacity building plans globally and drive units / revenue significantly higher.” Wrote in the note.
Shares of Tesla fell as much as 8% in intraday trading on Wednesday.
Murphy said the new price target came when Bank of America advanced its “sliding scale of valuation based on the theoretical growth opportunity that TSLA gets.” Bank of America confirmed its “neutral” rating on the auto toe manufacturer’s stock.
Bank of America said it sees Tesla using its stock price to raise more money by selling shares, boosting cash holdings that could be used to boost future revenue growth.
“It’s important to recognize that TSLA’s stock moves up and down, getting funding for cheaper capital growth, which is provided by investors with the stock’s share price,” Murphy said. “This dynamic is also true. Is, and it is this self-fulfilling prophecy that appears to explain the extreme movement of the TSLA stock and its upside and loss. “
While Tesla’s “hyper-growth doesn’t necessarily require self-funding,” Murphy said, as long as the company has access to capital at a much lower cost.
“Simply put, TSLA is a new disruptive (auto) company that may or may not be dominant in the long run, but it doesn’t matter because it can fund outside growth with an expansion of almost no cost capital driving capacity. He said.
Tesla has almost advanced 435% year to date.
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