Barclays upgraded Tesla to Overweight from Equal Weight on Monday, October 26, and raised its price target to $450 from $370, about 21% above Friday’s close. Analyst Dan Levy said a combination with SpaceX is now a key part of the bull case.
The SpaceX angle
“With a combination heavily expected, and with expectation for some premium to TSLA stock, we believe this should drive upside for the stock,” Levy wrote, as quoted by CNBC. Yahoo Finance reports that Barclays sees an all-stock acquisition of Tesla by SpaceX as the most likely structure. At $450 a share, a 20% premium, SpaceX would need to offer about 3.1 of its shares per Tesla share, leaving Musk with roughly 53% of the combined company’s voting power. Levy noted that approval needs more than 50% of all outstanding Tesla shares, so a vote isn’t a sure thing, and Barclays’ $250 downside case assumes no deal.
Musk called a merger a “good idea” last week, and both companies have formed special committees to study it. Over the weekend, thousands of retail holders signed a letter urging the board to pursue a deal.
Beyond the merger
- Autos: Tesla is on track to grow deliveries this year after two years of declines. Barclays forecasts 1.80 million vehicles in 2026 and 1.92 million in 2027, helped by FSD demand and Giga Shanghai exports.
- Energy: Management has said Megapacks are nearly sold out for 2027 on data center demand, and Barclays sees shipments growing more than 50%.
- Robotaxi: Barclays sees a sharp inflection in Robotaxi miles in recent weeks, and FSD was on more than 75% of new North American deliveries in the third quarter.
Tesla shares rose about 6% on Monday, Yahoo Finance reported.
Sources: CNBC and Yahoo Finance.