Tesla could follow a 4-part path to 35% stock upside after shaking off earnings worries, BofA says

• Tesla stock could surge 35% after its first-quarter earnings results, according to Bank of America.

• The bank upgraded Tesla stock to "Buy" and detailed a 4-part plan that could boost the stock.

• "The tide in news flow appears to suggest the risk to the stock is skewing more positively," BofA said.

Positive catalysts are starting to build for Tesla after it announced a dismal first-quarter earnings report, according to Bank of America.

Tesla reported lower-than-expected profits and revenues in the quarter but said it plans to accelerate its development of a low-cost vehicle after concerns were building that the company would ditch a lower priced model completely to focus on its robotaxi efforts.

The bank said that Tesla essentially cleared the deck of bad news, which sets the stock up for significant upside if it follows a four-part plan that includes an affordable vehicle and the buildout of a robotaxi network.

Bank of America analyst John Murphy upgraded Tesla stock to "Buy" from "Neutral" and reiterated his $220 price target, representing potential upside of 35% from current levels.