Only five of 60 analysts tracked by Bloomberg rate Tesla a sell, the lowest share since early 2015. Barclays upgraded the stock to overweight on Monday, calling a SpaceX merger “ a key part of the Tesla bull case “, after BNP Paribas and CLSA dropped their sell ratings last week.
Wall Street analysts are dropping their bearish calls on Tesla as a merger with SpaceX looks more likely, Bloomberg reported . Only five of the 60 analysts it tracks now rate the stock a sell, the lowest share since early 2015. At the start of the year, 15 of 71 did.
Barclays upgraded Tesla to overweight on Monday and raised its price target to $450 from $370, Investing.com reported . BNP Paribas and CLSA dropped their sell ratings last week.
“ The anticipated merger is now a key part of the Tesla bull case, as it provides upside potential to the stock, ” Barclays analyst Dan Levy wrote.
BNP’s James Picariello raised his target to $420 from $266, which he said “ exclusively ” reflects the higher chance of SpaceX buying Tesla. He is still cautious about Tesla’s cash burn and the pace of its AI work.
Investors have eyed a tie-up since SpaceX’s IPO in June. Talk of a deal grew last week, when Musk said on SpaceX’s earnings call that both boards had formed special committees to study a merger. Musk said he personally favours a deal, but that it would be “ an exaggeration ” to say one will definitely happen.
Barclays expects an all-stock deal with SpaceX as the buyer. It would need the backing of more than half of each company’s total voting power, which Barclays called a “ high hurdle ”. A deal would also likely need EU merger approval .
Tesla shares rose 6% on Monday but are still down 12% this year, while the S&P 500 is up 12%. Last week, Tesla’s third-quarter profit beat estimates despite falling 43% from a year earlier.
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