Deutsche Bank thinks Tesla's growth could be set to explode, but it won't recommend buying the stock

Deutsche Bank says Tesla is about to explode, but that doesn't mean the stock is worth buying right now.

In a note on Tuesday, analysts at the firm downgraded the stock to "Buy" from "Hold" while raising their price target 14% to $280 from $245.

Tesla shares closed at $279.72 on Monday.

In a note, Deutsche Bank wrote (emphasis added):

"We've been bullish on Tesla's prospects, based on the company's Electric Vehicle opportunity. In late April Tesla announced plans to leverage their scale and battery systems knowhow in Stationary Storage. This market is in its infancy (1.2 GWh added in the US in 2014).

But we've become convinced that it will increase dramatically (14.3 GWh by 2020). The global opportunity is likely >2x this level. And we believe that TSLA could become a dominant player. But at this point, Tesla's shares appear to already reflect this opportunity."

Tesla shares are up 25% year-to-date and fell about 2% in premarket trading on Tuesday.

In their note Tuesday, Deutsche Bank writes that although it's hard to forecast how huge the stationary storage market will be, experts are saying the US market could be worth more than $2 billion per year by 2020.

And could be worth an additional $2.20 to Tesla's earnings per share.

Over in Tesla's automobiles segment, the firm forecasts that electric vehicles could cost just as much as diesel cars within the next five years, and could reach parity with gasoline by 2020.

"We further believe that no company is better positioned to take advantage of this development than Tesla," Deutsche Bank writes. But at this point, much of that growth is already priced into the stock.

There could be near-term factors that drive shares even higher, including the launch of Model X and continued positive reception of Tesla's energy solution. The firm adds, however, that, "Nonetheless, based on our current valuation framework there is insufficient upside to support a continued Buy recommendation."

This analyst action on Tesla - downgrading the rating on the stock with a bullish forecast for the company - is similar to something we saw Bank of America Merril Lynch do last week.

On Thursday, BAML lifted their price target 177% to $180 from $65, but maintained an "Underperform" rating on shares.