Jefferies Lowers Tesla Price Target to $375 Amid Merger Speculation
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 55 minutes ago
0mins
Source: stocktwits
- Price Target Cut: Jefferies has lowered its price target for Tesla (TSLA) to $375, warning that merger speculation could lead TSLA to trade more like a proxy for SpaceX, undermining investor confidence in its fundamentals.
- Increased Merger Risk: As consensus around a Tesla-SpaceX merger grows, Jefferies highlighted that investors may face dilution risks, with TSLA's trading becoming increasingly tied to SpaceX's valuation rather than its own performance metrics.
- Delivery Expectations Raised: Goldman Sachs predicts Tesla's second-quarter deliveries will exceed 400,000 units, raising its forecast to 420,000, although year-over-year comparisons still show a decline, indicating strong demand for Tesla's vehicles.
- Retail Sentiment Bearish: According to Stocktwits, retail sentiment for Tesla is extremely bearish, with many users expressing concerns about the stock potentially falling below $300, reflecting significant uncertainty about the company's future prospects.
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Analyst Views on TSLA
Wall Street analysts forecast TSLA stock price to rise
30 Analyst Rating
12 Buy
11 Hold
7 Sell
Hold
Current: 400.490
Low
25.28
Averages
401.93
High
600.00
Current: 400.490
Low
25.28
Averages
401.93
High
600.00
About TSLA
Tesla, Inc. designs, develops, manufactures, sells and leases high-performance fully electric vehicles and energy generation and storage systems, and offers services related to its products. Its segments include automotive, and energy generation and storage. The automotive segment includes the design, development, manufacturing, sales and leasing of high-performance fully electric vehicles, and sales of automotive regulatory credits. It also includes sales of used vehicles, non-warranty maintenance services and collisions, part sales, paid supercharging, insurance services revenue and retail merchandise sales. The energy generation and storage segment include the design, manufacture, installation, sales and leasing of solar energy generation and energy storage products and related services and sales of solar energy systems incentives. Its consumer vehicles include the Model 3, Y, S, X and Cybertruck. Its lithium-ion battery energy storage products include Powerwall and Megapack.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
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- Quarterly Growth Expectations: Despite sales challenges, Tesla is projected to deliver 400,000 EVs in Q2 2026, marking the second consecutive quarter of growth; achieving this target could alleviate market concerns regarding its long-term growth trajectory.
- Increased Competitive Pressure: With Geely Automotive's New Energy Vehicle sales soaring by 90% to nearly 1.7 million units in 2025, Tesla faces intensified competition, particularly in Europe, where Geely's expansion plans may further erode Tesla's market share.
- Future Product Potential: Although Tesla's P/E ratio stands at a staggering 366, significantly higher than the Nasdaq-100's 34.4, many investors remain optimistic about new products like the Cybercab and Optimus, which are expected to generate substantial revenue potential, especially with Optimus slated for mass production by the end of 2026.
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- Lockup Period Impact: With insiders restricted from selling shares, significant stock price volatility is expected in the coming months, particularly after the second-quarter earnings release, when a flood of new shares could enter the market, exacerbating price fluctuations.
- Continued Massive Losses: SpaceX reported losses of $4.9 billion in 2025 and $4.3 billion in Q1 2026, with management anticipating increased capital expenditures and operating expenses, suggesting that the company may remain unprofitable for an extended period unless revenue growth improves significantly.
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- Price Target Cut: Jefferies has lowered its price target for Tesla (TSLA) to $375, warning that merger speculation could lead TSLA to trade more like a proxy for SpaceX, undermining investor confidence in its fundamentals.
- Increased Merger Risk: As consensus around a Tesla-SpaceX merger grows, Jefferies highlighted that investors may face dilution risks, with TSLA's trading becoming increasingly tied to SpaceX's valuation rather than its own performance metrics.
- Delivery Expectations Raised: Goldman Sachs predicts Tesla's second-quarter deliveries will exceed 400,000 units, raising its forecast to 420,000, although year-over-year comparisons still show a decline, indicating strong demand for Tesla's vehicles.
- Retail Sentiment Bearish: According to Stocktwits, retail sentiment for Tesla is extremely bearish, with many users expressing concerns about the stock potentially falling below $300, reflecting significant uncertainty about the company's future prospects.
See More
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- Merger Rumors Heat Up: Analyst Dan Ives estimates an 80% chance of a merger between SpaceX and Tesla, although this remains unconfirmed, the increasing market focus on this potential merger could significantly influence the stock trajectories of both companies.
- Management Hints at Merger Logic: SpaceX President Gwynne Shotwell suggested in a recent interview that a merger could ease Elon Musk's workload, emphasizing the synergies between the two companies, which adds credibility to the ongoing merger speculation.
- Market Confidence Divergence: Despite high expectations for a merger, prediction markets currently price the likelihood of a SpaceX-Tesla merger before May 1, 2027, at only 46%, indicating a lack of consensus among investors regarding the merger's feasibility, highlighting the complexities and uncertainties involved.
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- Merger Probability Analysis: Analyst Dan Ives estimates an 80% chance of a SpaceX-Tesla merger, citing synergies between the two companies, although market confidence in such a deal is lower at just 46%, indicating mixed sentiments among investors.
- Management Hints at Merger Logic: SpaceX President Gwynne Shotwell suggested that a merger could make Elon Musk's life easier, indicating a willingness from management to explore the potential synergies, which could enhance operational efficiencies in the future.
- Shareholder Support Challenges: Despite the optimistic merger outlook, Musk holds only a 20% stake in Tesla, necessitating strong shareholder backing for a merger, with Tesla investors likely preferring to wait for catalysts like robotaxi and self-driving advancements before considering such a significant move, adding uncertainty to the merger prospects.
See More
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- Positive Customer Feedback: Drivers from ArcBest reported excellent visibility and comfort during the pilot, while Covenant Logistics expressed amazement at the Semi's performance during testing in Southern California, contributing to a favorable reputation for Tesla in the competitive trucking market.
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See More
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- Declining EV Sales: Tesla delivered 1.79 million electric vehicles in 2024, reflecting a 1% decline year-over-year, with deliveries dropping further to 1.63 million in 2025, a 9% decrease, significantly impacting financial results as EV sales account for over 70% of total revenue.
- Quarterly Growth Expectations: Despite sales challenges, Tesla is projected to deliver 400,000 EVs in Q2 2026, marking the second consecutive quarter of growth; achieving this target could alleviate market concerns regarding its long-term growth trajectory.
- Increased Competitive Pressure: With Geely Automotive's New Energy Vehicle sales soaring by 90% to nearly 1.7 million units in 2025, Tesla faces intensified competition, particularly in Europe, where Geely's expansion plans may further erode Tesla's market share.
- Future Product Potential: Although Tesla's P/E ratio stands at a staggering 366, significantly higher than the Nasdaq-100's 34.4, many investors remain optimistic about new products like the Cybercab and Optimus, which are expected to generate substantial revenue potential, especially with Optimus slated for mass production by the end of 2026.
See More
SpaceX Faces Stock Volatility Risks Post-IPO
- Overvaluation Risk: SpaceX's current stock price trades at a staggering 125 times earnings, significantly above the S&P 500's average of 3.7, indicating that investor expectations for future growth may be overly optimistic, potentially leading to a price correction.
- Lockup Period Impact: With insiders restricted from selling shares, significant stock price volatility is expected in the coming months, particularly after the second-quarter earnings release, when a flood of new shares could enter the market, exacerbating price fluctuations.
- Continued Massive Losses: SpaceX reported losses of $4.9 billion in 2025 and $4.3 billion in Q1 2026, with management anticipating increased capital expenditures and operating expenses, suggesting that the company may remain unprofitable for an extended period unless revenue growth improves significantly.
- Intensifying Market Competition: While SpaceX leads in the aerospace sector, increasing competition and the majority of its market opportunities being in the AI sector may weaken its economic moat in space, raising investment risks.
See More
Jefferies Lowers Tesla Price Target to $375 Amid Merger Speculation
- Price Target Cut: Jefferies has lowered its price target for Tesla (TSLA) to $375, warning that merger speculation could lead TSLA to trade more like a proxy for SpaceX, undermining investor confidence in its fundamentals.
- Increased Merger Risk: As consensus around a Tesla-SpaceX merger grows, Jefferies highlighted that investors may face dilution risks, with TSLA's trading becoming increasingly tied to SpaceX's valuation rather than its own performance metrics.
- Delivery Expectations Raised: Goldman Sachs predicts Tesla's second-quarter deliveries will exceed 400,000 units, raising its forecast to 420,000, although year-over-year comparisons still show a decline, indicating strong demand for Tesla's vehicles.
- Retail Sentiment Bearish: According to Stocktwits, retail sentiment for Tesla is extremely bearish, with many users expressing concerns about the stock potentially falling below $300, reflecting significant uncertainty about the company's future prospects.
See More
SpaceX IPO Surges 35% Amid Merger Rumors with Tesla
- Strong IPO Performance: SpaceX went public on June 12, raising over $85 billion with an initial share price of $135, and has since surged over 35%, establishing itself as the most high-profile name in the aerospace sector, reflecting strong investor confidence in its growth potential.
- Merger Rumors Heat Up: Analyst Dan Ives estimates an 80% chance of a merger between SpaceX and Tesla, although this remains unconfirmed, the increasing market focus on this potential merger could significantly influence the stock trajectories of both companies.
- Management Hints at Merger Logic: SpaceX President Gwynne Shotwell suggested in a recent interview that a merger could ease Elon Musk's workload, emphasizing the synergies between the two companies, which adds credibility to the ongoing merger speculation.
- Market Confidence Divergence: Despite high expectations for a merger, prediction markets currently price the likelihood of a SpaceX-Tesla merger before May 1, 2027, at only 46%, indicating a lack of consensus among investors regarding the merger's feasibility, highlighting the complexities and uncertainties involved.
See More
Rumors of SpaceX-Tesla Merger Heat Up
- Strong IPO Performance: SpaceX went public on June 12, raising over $85 billion, with shares rallying over 35% from the initial price of $135, establishing itself as the most high-profile name in the space sector, reflecting strong investor confidence in its growth potential.
- Merger Probability Analysis: Analyst Dan Ives estimates an 80% chance of a SpaceX-Tesla merger, citing synergies between the two companies, although market confidence in such a deal is lower at just 46%, indicating mixed sentiments among investors.
- Management Hints at Merger Logic: SpaceX President Gwynne Shotwell suggested that a merger could make Elon Musk's life easier, indicating a willingness from management to explore the potential synergies, which could enhance operational efficiencies in the future.
- Shareholder Support Challenges: Despite the optimistic merger outlook, Musk holds only a 20% stake in Tesla, necessitating strong shareholder backing for a merger, with Tesla investors likely preferring to wait for catalysts like robotaxi and self-driving advancements before considering such a significant move, adding uncertainty to the merger prospects.
See More
Tesla's Semi Truck Revives Market Potential
- Growing Order Momentum: Tesla's Semi truck, following its entry into high-volume production, has secured a significant order of 370 units from WattEV worth approximately $100 million, indicating strong market demand and the potential for Tesla to disrupt the trucking industry.
- Significant Efficiency Improvement: ArcBest's pilot program in 2025 demonstrated the Tesla Semi achieving an efficiency of 1.55 kWh per mile, surpassing Elon Musk's 2022 promise of 1.7 kWh per mile, showcasing Tesla's technological advancements that could influence large fleet purchasing decisions.
- Positive Customer Feedback: Drivers from ArcBest reported excellent visibility and comfort during the pilot, while Covenant Logistics expressed amazement at the Semi's performance during testing in Southern California, contributing to a favorable reputation for Tesla in the competitive trucking market.
- Competitive Market Advantage: With an 822 kWh battery providing approximately 500 miles of range, Tesla's Semi outperforms competitors like Freightliner and Volvo, further solidifying Tesla's leadership position in the electric truck market.
See More
