Buy Tesla ahead of potential SpaceX merger, says Barclays
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A potential merger with SpaceX makes Tesla a buy, according to Barclays. The bank upgraded the electric vehicle stock to overweight from equal weight. It also hiked its price target to $450 from $370, suggesting 21% upside from Friday's close. "The recent dialogue around Tesla has skewed heavily to a potential combination with SPCX," analyst Dan Levy said Monday in a note to clients. "With a combination heavily expected, and with expectation for some premium to TSLA stock, we believe this should drive upside for the stock." Elon Musk said last week that a Tesla-SpaceX merger would be a "good idea," noting that committees at both companies have been formed to discuss a potential combination. TSLA YTD mountain TSLA year to date Beyond the merger, Tesla could rally as its core and emerging businesses continue to grow, according to Levy. "The auto business is on track to grow this year after two years of declines, and 2027 should see further upside, supported by demand spurred by [full self-driving], as well as rising exports from Giga Shanghai," Levy wrote. "Similarly, Tesla noted that its Energy business is nearly sold out for 2027 given robust demand from data centers - which we believe could support a robust > 50% growth in Shipments." The analyst also noted that the firm's robotaxis have seen a sharp inflection in miles driven, giving Levy more confidence Tesla can compete with rival Waymo's fleet. Of the 49 analysts covering Tesla, 25 have a buy or strong buy rating on the stock, while 22 have a hold on it, LSEG data shows. Shares have fallen more than 17% year to date.