In the anticipation of Tesla's (NASDAQ: TSLA) battery day, which will take place on September 22, both Morgan Stanley and the BofA Securities have raised their ratings on Tesla stock.

Morgan Stanley’s analyst Adam Jonas upgraded the stock to "Equal-weight" from "Underweight", hiking the price target from $1,050 per share to $1,360. Jonas included value from the battery business in the bank’s base case for the first time.

“With this report, we now feel we can justify transferring some value of the 3rd party battery business from the realm of the bull case into our base case," Jonas wrote in a note to clients on Thursday.

“Based on the body of evidence collected and research conducted by our tech colleagues, we now give Tesla credit for a 3rd party battery/EV powertrain supply business in our base case (previously in our bull case scenario) that is worth $310/share," he added.

Jonas also hiked the price target in the bull case scenario from $2,500 per share to $2,636, again based on the value of the 3rd party battery business.

Similarly, BofA Securities' John Murphy hiked Tesla stock to “Neutral” from “Underperform”, significantly raising the price target from $800 to $1,750.

“Musk’s leadership, a compelling brand, and improved execution are driving an ever-increasing stock price. This is direct evidence that the company has unfettered access to low-cost capital, which remains a key advantage that may (and should) be leveraged to accelerate growth to almost 50% per annum over the next five years,” Murphy wrote in a note sent today to clients.

Unlike Morgan Stanley’s Jonas, BofA Securities' analyst places a strong emphasis on the low cost to capital. This is because "building capacity in the automotive industry is expensive and often generates low returns."

"It is important to recognize that the higher the upward spiral of TSLA's stock goes, the cheaper capital becomes to fund growth, which is then rewarded by investors with a higher stock price," the analyst added.

Tesla's battery day will take place next month at the Fremont factory, Tesla's headquarters in California. Journalists believe that Musk may use this opportunity to announce a major battery breakthrough.