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Bank of America cuts Tesla price target by over 20%, says more stock sales could be coming

SpaceX founder and Tesla CEO Elon Musk looks on as he visits the construction site of Tesla's gigafactory in Gruenheide, near Berlin, Germany, May 17, 2021.
Michele Tantussi | Reuters

Bank of America slashed its price target for Tesla on Friday, saying the electric auto maker's preferred option to raise money and invest in growth could limit upside for shareholders.

Tesla used the equity market and its red-hot stock to raise billions in 2020, but the market has cooled on electric vehicle stocks in recent months. BofA analyst John Murphy, who has a neutral rating on Tesla, cut the price target on the stock by 22% to $700 per share from $900, saying that the potential for more stock sales to fund growth could be more dilutive to shareholders.

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