Key Highlights
- Bank of America upgraded Tesla to Buy from Hold, setting a $460 price target.
- The bank identifies Tesla as “the current leader in consumer autonomy.”
- Bank of America assigns a valuation exceeding $30 billion to Tesla’s Optimus humanoid division and $90 billion to its Energy operations.
- Analyst Buy ratings for Tesla stand at 44%, trailing the S&P 500 average of 55%.
- Tesla shares gained 2% early Wednesday while remaining down 13% for the year.
Tesla (TSLA) shares climbed during early Wednesday trading after Bank of America resumed coverage with a Buy rating and established a $460 price target, pushing the stock approximately 2% higher to $400.27.
The rating elevation followed a challenging period for the electric vehicle maker. Tesla shares had declined 9% following its fourth-quarter earnings report on January 28, which exceeded expectations, and entered Wednesday’s trading session with a 13% year-to-date loss.
BofA analyst Alex Perry described Tesla as “the current leader in consumer autonomy,” highlighting the company’s Full Self-Driving technology as the cornerstone for an anticipated robotaxi operation.
Tesla’s FSD subscription costs $99 monthly and manages most standard driving tasks for vehicle owners. Bank of America views this consumer technology as the pathway toward a comprehensive autonomous transportation network.
Tesla initiated a robotaxi pilot program in Austin, Texas, during June and aims to reach nine cities by the first half of 2026.
The consensus analyst price target for Tesla currently stands at $427. Bank of America’s $460 projection exceeds this average, indicating the firm holds a more optimistic outlook than the broader analyst community.
Analyst sentiment toward Tesla shows division despite the upgrade. Buy ratings account for only 44% of analyst coverage — notably below the approximately 55% Buy-rating ratio typical for S&P 500 companies.
Tesla trades at a P/E ratio of 363, and InvestingPro’s Fair Value assessment indicates the stock appears overvalued at present prices. Five analysts have recently increased their earnings projections for the coming period, though.
Optimus and Energy Segments Command Substantial Valuations
Bank of America provided a segmented valuation breakdown for Tesla’s business units. The firm estimates Tesla’s Optimus humanoid robot venture at more than $30 billion, representing roughly 2% of Tesla’s $1.47 trillion market capitalization.
Optimus robots are projected to enter manufacturing environments initially, with capacity to fill a segment of the roughly 13 million U.S. manufacturing positions, before potentially moving into residential applications.
Tesla’s Energy division, encompassing residential Powerwall battery systems and Megapacks for utilities and data centers, received a $90 billion valuation from Bank of America, comprising 6% of the company’s total worth.
Noteworthy Recent Company Updates
Several developments have shaped Tesla’s recent trajectory. GLJ Research maintained its Sell rating on Tesla stock, expressing skepticism regarding the Optimus project’s commercial prospects.
A federal judge declined Tesla’s request to reverse a $243 million verdict related to a fatal 2019 Autopilot incident, determining that the evidence substantially supported the jury’s conclusion.
Meanwhile, Tesla recorded a 55% increase in French registrations year-over-year, suggesting potential stabilization in European markets following two years of sales declines. Norwegian markets also demonstrated growth.
Tesla shares had risen 44% over the trailing 12 months entering Wednesday’s trading session, despite year-to-date headwinds.
