Bank of America Downgrades Tesla to Neutral

Bank of America analyst John Murphy has downgraded Tesla Inc. from a 'Buy' to a 'Neutral' rating, citing heightened execution risks for 2025 despite raising the price target from $400 to $490. This downgrade follows a significant rise in Tesla's shares after Donald Trump's 2024 election win, which saw a 60% surge by the year's end. Although Tesla Energy had a strong year with record energy storage deployments, the company's vehicle deliveries fell short of expectations, marking a year-over-year decline. Murphy highlighted future catalysts such as the introduction of a low-cost vehicle and the launch of Robotaxi, but cautioned about competitive and operational challenges. Meanwhile, UBS reported that Tesla's fourth-quarter vehicle deliveries reached a record 495,600 units but were below market expectations, leading to a 'sell' rating with a target price of $226. Analysts remain divided on Tesla's outlook, with some expressing optimism while others adjust their expectations downward due to potential risks ahead.