The Zhitong Finance App learned that the market generally believes that if Tesla (TSLA.US) and SpaceX (SPCX.US) reach a merger, it is expected to boost Tesla's stock price, but Barclays's Dan Levy believes that the car company's own business prospects also have upward momentum, which prompted the agency to upgrade Tesla's stock rating from “neutral” to “increase holdings.”
Levy wrote, “We believe that the story about Tesla shares should not just revolve around a potential merger... We believe that the company's recent earnings call unleashed a number of key signals that could also support stronger stock prices.”
Levy believes that the core business is expected to resume growth this year after two years of decline, and 2027 should see further upside, supported by demand for fully automated driving and the growth in exports from its Shanghai Gigafactory.
Additionally, Tesla indicated that its energy business was almost sold out in 2027 due to strong data center demand. Levy expects energy delivery to increase by more than 50%.
Tesla CFO Vaibhav Taneja said during the company's earnings conference call with analysts on October 21: “Our second-best deployment quarter achieved 13.7 gigawatt-hours of energy storage deployment, and the gross energy margin increased from 20.4% to 33.1%.”
The Robotaxi business is also gaining momentum, which has raised expectations that Tesla can compete more directly with Waymo in the field of autonomous online car-hailing.
Levy wrote in a report to clients: “We believe that improvements in Tesla's core business, combined with the inflection point of Robotaxi, and the possible premium from the merger with SpaceX provide an attractive risk-return for the stock.”
The opportunity for Tesla's share price to rise further contributed to a new target price of $450, a 22% increase from the previous target price.
By Monday's close, Tesla's stock price had surged more than 5%, breaking through the 200-day moving average and pushing the stock to its highest level since July.