Key Takeaways
- Bank of America upgraded Tesla to Buy from Hold, setting a $460 price objective.
- The investment bank described Tesla as “the current leader in consumer autonomy.”
- BofA assigns a valuation exceeding $30 billion to Tesla’s Optimus robot division and $90 billion to its Energy operations.
- Just 44% of Wall Street analysts recommend buying Tesla, trailing the S&P 500’s 55% average.
- Shares gained 2% in early Wednesday trading despite a 13% year-to-date decline.
Tesla (TSLA) shares experienced upward momentum during early Wednesday trading following Bank of America’s reinitiation of coverage with a Buy recommendation and a $460 price objective, pushing the stock approximately 2% higher to $400.27.
The rating upgrade follows a challenging period for the electric vehicle manufacturer. Shares had declined 9% following the company’s better-than-expected fourth-quarter earnings announcement on January 28, and had dropped 13% year-to-date prior to Wednesday’s trading session.
BofA’s Alex Perry characterized Tesla as “the current leader in consumer autonomy,” highlighting its Full Self-Driving technology as the cornerstone of what the financial institution anticipates will evolve into a comprehensive robo-taxi operation.
Tesla’s FSD service costs subscribers $99 monthly and handles the majority of standard driving tasks for vehicle owners. BofA views this consumer technology as the pathway toward a more extensive autonomous transportation network.
The electric vehicle pioneer initiated robo-taxi operations in Austin, Texas, last June and intends to roll out services across nine metropolitan areas during the first two quarters of 2026.
Wall Street’s consensus price target for Tesla currently stands at $427. BofA’s $460 projection exceeds that benchmark, indicating a more optimistic outlook compared to broader Street expectations.
Despite the positive rating change, Wall Street’s overall sentiment toward Tesla remains divided. Only 44% of covering analysts assign Buy ratings to the stock — noticeably below the approximately 55% Buy-rating ratio typical for S&P 500 components.
Tesla trades at a P/E multiple of 363, and InvestingPro’s Fair Value methodology indicates the shares are overvalued at present price levels. Nevertheless, five analysts have recently increased their earnings forecasts for the coming period.
Billions in Value for Optimus and Energy Divisions
Bank of America provided a segmented breakdown of Tesla’s enterprise value. The financial institution estimates Tesla’s Optimus humanoid robot venture at more than $30 billion, representing approximately 2% of the company’s $1.47 trillion market capitalization.
Optimus robots are projected to debut in industrial manufacturing environments first, with capability to replace portions of the roughly 13 million manufacturing positions in the United States, before potentially entering residential markets.
Tesla’s Energy division, encompassing residential Powerwall battery systems and Megapack utility-scale storage solutions for power companies and data facilities, received a $90 billion valuation from BofA, equivalent to 6% of total enterprise value.
Latest Developments to Monitor
Not all news has favored Tesla recently. GLJ Research maintained its Sell stance on the stock, expressing skepticism regarding Optimus project’s commercial prospects.
Additionally, a federal judge denied Tesla’s motion to overturn a $243 million jury award related to a fatal 2019 Autopilot collision, determining that evidence substantially supported the jury’s initial verdict.
On a more positive note, Tesla documented a 55% surge in vehicle registrations in France on a year-over-year basis, suggesting potential stabilization across European markets following two consecutive years of declining sales figures. Norwegian markets similarly demonstrated growth.
Tesla shares had appreciated 44% over the trailing twelve-month period entering Wednesday’s session, despite year-to-date headwinds.
