Barclays raises Tesla price target to $450 on SpaceX expectations

Barclays, with its new $450 price target, upgraded its rating on Tesla (TSLA) stock from Equal Weight to Overweight. In its assessment projecting 21% upside potential compared to the previous Friday's close, the British bank cited the electric vehicle maker's potential merger with SpaceX as the primary rationale. The price target was revised from $370 to $450.

How is the merger process with SpaceX progressing?

In a note to clients, analyst Dan Levy noted that discussions around the company were predominantly focused on the possibility of combining under a common roof with SpaceX. Levy stated that the potential structure would create a merger premium for the stock and drive valuation higher. Elon Musk stated the previous week that he looked favorably upon the idea of merging the 2 companies and noted that committees had been established on both sides to conduct talks.

What are Tesla's operational growth targets?

The research note also addressed growth dynamics in core business areas. It stated that following a 2-year contraction, the automotive arm entered a recovery process this year, which will be supported in 2027 by demand for full self-driving software and increasing exports from the Shanghai factory. It was emphasized that, in line with strong demand from data centers, the energy storage unit's 2027 capacity is almost sold out and shipments could see an increase of over 50%. It was noted that the sharp rise in distance traveled by robotaxis enhanced competitiveness against the rival Waymo fleet.

According to LSEG data, 25 of the 49 analysts covering Tesla shares report a positive view on the stock, while 22 analysts maintain a neutral stance. Tesla shares have lost more than 17% in value since the beginning of the year.

This content is for information purposes only and does not constitute investment advice.