Tesla (TSLA) stock closed up 5.2% at $391.62 on Monday, October 26, after Barclays (BCS) analyst Dan Levy upgraded it to Overweight from Equal Weight and raised his target to $450 from $370. Shares touched $397.27 during the session, about 6.7% above Friday’s close, on 53.1 million shares traded against a 30-day average of 36.0 million.
That move added roughly $77 billion to Tesla’s market value, and a big piece of the case behind it rests on a deal nobody has signed.
Barclays Is Pricing In a SpaceX Premium
Levy gave three operating reasons: an auto business he expects to grow this year after two years of declines, Megapack supply Tesla says is nearly sold out for 2027, and a fast-growing Robotaxi fleet. A fourth reason was the prospect of a combination with SpaceX (SPCX), which Barclays views as widely expected and likely to include a premium for Tesla holders.
There’s a real basis for that. On SpaceX’s October 20 earnings call, Elon Musk said both companies had formed special committees of independent directors and that a merger would be “a good idea.” He also said the committees hadn’t agreed on terms and might never do so. Levy had already sketched the structure on October 14: an all-stock deal with SpaceX as the buyer, based on market caps of $2.1 trillion and $1.5 trillion.
Tesla’s Own Earnings Can’t Carry $450
Tesla trades at 183.15x next-twelve-months normalized earnings, against a five-year average of 107.91x. At that average, the stock would sit near $231, about 41% below Monday’s close.
Earnings are expected to climb. Analysts forecast normalized EPS of $1.77 for 2026, $2.18 for 2027 and $3.22 for 2028.
Barclays’ $450 still works out to about 206x 2027 earnings and 140x 2028 earnings. Paying that needs the operating story to get much bigger, or a buyer to pay up first.
TIKR Tracks 49 Analysts on Tesla. How Many Say “Buy”?
See the full breakdown of Buy, Hold, and Sell ratings on Tesla, along with Wall Street’s revenue and earnings estimates, all in one place. More than 500,000 investors use TIKR to research stocks like this one. See Tesla’s Analyst Ratings
Energy Is the Strongest Part of the Bull Case
Energy generation and storage revenue reached $12.77 billion in 2025, up 27% from $10.09 billion and more than triple 2022’s $3.91 billion. That track record backs Levy’s call for Megapack shipments to grow more than 50% in 2027.
The latest quarter was softer. Third-quarter energy revenue fell about 16% from a year earlier to $2.88 billion, despite near-record deployments. Annualized, that’s roughly $11.5 billion, below 2025’s total. A full 2027 order book helps, but energy is still a business doing about $12 billion a year inside a $1.55 trillion company.
The Question SpaceX and Tesla Haven’t Answered
What the premium looks like, and who pays it, is still unknown. In an all-stock deal, Tesla holders get paid in SpaceX shares, and SpaceX is the company expected to burn cash: Bloomberg consensus cited by Barclays has Tesla producing $12 billion of free cash flow in 2030 while SpaceX burns $17 billion. Tesla’s side also needs approval from 50% of all outstanding shares, not just the shares that vote, which Musk himself called a high hurdle. He owns nearly a fifth of Tesla, but as a conflicted party he has no seat in the talks.
Strip out the deal and Barclays’ upgrade is hard to justify at 183x earnings. If the committees agree terms with a real premium, the merger part of the thesis pays off. Tesla’s annual meeting is set for December 3, but the agenda carries no merger proposal, and neither company has set a deadline for a deal. Until terms exist, Tesla has to hold that multiple on its own earnings, and that’s the part of Monday’s rally I’d trust least.
So What Is Tesla Stock Actually Worth?
TIKR lets you forecast the future price of any stock in less than a minute. Just enter a few assumptions into TIKR’s valuation model and see what TSLA stock could be worth. Start from Wall Street consensus estimates, or adjust the inputs to reflect your own view of the business. It’s free to use.
Disclaimer:
Please note that the articles on TIKR are not intended to serve as investment or financial advice from TIKR or our content team, nor are they recommendations to buy or sell any stocks. We create our content based on TIKR Terminal’s investment data and analysts’ estimates. Our analysis might not include recent company news or important updates. TIKR has no position in any of the stocks mentioned. Thank you for reading, and happy investing!
