Tesla Upgraded by S&P After Cash Levels Soar to Record High

(Bloomberg) -- Tesla Inc. was upgraded by S&P Global Ratings -- putting the company two steps from investment-grade -- after a recent share sale boosted its cash to record levels.

The rater raised Tesla one notch to BB, in line with that of Moody’s Investors Service. S&P assigned a positive outlook, saying there is at least a 33% chance that Tesla could be upgraded again in the next year if its competitive advantage “strengthens meaningfully,” analysts Lawrence Orlowski and Nishit Madlani said in a report Thursday.

Tesla raised $5 billion in an equity sale earlier this month to capitalize on a surge in its shares that pushed the company into the S&P 500. It’s had five consecutive quarters of profit and a growing recognition on Wall Street that battery-powered electric vehicles are here to stay. The Palo Alto, California-based company aims to deliver 500,000 cars this year, which would be a huge milestone for the 17-year-old company led by Chief Executive Officer Elon Musk.

This is Tesla’s third upgrade during the pandemic, a feat “almost unheard of in the sector,” according to Bloomberg Intelligence analyst Joel Levington.

Read more: Tesla’s accelerating toward high grade road at S&P: Credit React

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