Tesla stock jumps as Barclays bets a SpaceX takeout bump is coming

Barclays believes a Tesla ( TSLA ) merger with SpaceX ( SPCX ) will deliver a takeout premium to shareholders while the EV maker's core business and robotaxi push gain momentum.

Lead analyst Dan Levy upgraded Tesla to Overweight from Equal Weight, and raised his price target to $450 from $370, citing the confluence of positive factors.

"We believe the improvement in Tesla's core business + inflection in Robotaxi, alongside the potential premium from a combination with SPCX [SpaceX], offers attractive risk/reward for the stock," Levy wrote.

On SpaceX's earnings call last week, CEO Elon Musk disclosed that both companies had formed special committees to discuss a deal. He said there was "a lot of merit to combining the companies."

Musk has long said he wants around 25% of Tesla, versus 20% today. He owns about 48% of SpaceX and holds around 82% of its voting power through super-voting Class B shares.

Levy called "Musk's desire to consolidate control" the "crucial element."

Barclays sees an all-stock acquisition of Tesla by SpaceX as the most likely structure. At $450 a share, or a 20% premium, SpaceX would need to offer around 3.1 of its stock per Tesla share. That would leave Musk with about 53% of the combined company's voting power.

Approval requires more than 50% of total outstanding shares, and abstentions count as "no" votes. "While we expect a merger vote would still pass, we do not see it as a surefire approval," Levy wrote. Barclays' $250 downside case assumes no deal happens.

Beyond the deal, Levy sees improving fundamentals. Tesla is on track to grow deliveries this year after two straight annual declines. Barclays forecasts 1.80 million vehicles in 2026 and 1.92 million in 2027.

Full self-driving (FSD) was on more than 75% of North American deliveries in the third quarter , up about 20 percentage points from the second quarter. Exports from Giga Shanghai now make up around 25%-30% of global volume.

Energy is another bright spot. Management said Tesla is nearly sold out of megapacks for 2027 on strong data center demand. Barclays sees deployments growing at least 50% next year as Megafactory Houston ramps up.

As of Oct. 18, Tesla's robotaxi fleet had logged around 3.1 million unsupervised miles across 6 cities, up from about 400,000 in mid-July. Weekly miles jumped from 70,000 to around 560,000 over that span.

Barclays doesn't expect robotaxis to matter financially in the near- to mid-term. But it argues "signs of significant progress in its operational cities could drive the narrative on the stock."

Pras Subramanian is Lead Auto Reporter for Yahoo Finance. You can follow him on X and on Instagram .