Bank of America Sees 8% Annual Small-Cap Returns, Tesla Buy with $460 Target
BofA Global Research sees the Russell 2000’s 4% month-to-date drop versus historical 8–11% shock drawdowns and highlights a 0.78x small-cap forward P/E with projected 8% annual returns over the next decade. The firm also reinstated a Buy rating with a $460 target on Tesla to leverage its robotaxi ambitions.
1. Russell 2000 Analysis
Bank of America Global Research indicates the Russell 2000 has declined roughly 4% this month compared with historical averages of an 8% to 11% drop during major macro or geopolitical shocks. It highlights that small caps trade at a 0.78x forward P/E relative to large caps and projects an 8% annualized return over the next decade.
2. Tesla Rating Reinstated
The firm reinstated a Buy rating on Tesla with a $460 price target, citing the company’s expanding robotaxi operations and growing energy generation segment. It notes that mass production of the Cybercab and Optimus humanoid robot remains on track for 2026, positioning Tesla as a leading player in autonomous mobility and AI-driven infrastructure.