Tesla's bearish ratings hit an 11-year low as Barclays lifts its target to $450 and the stock jumps 5.2%
Bearish ratings on Tesla just hit an 11-year low as BNP Paribas, CLSA and Barclays folded within one week, and the stock jumped 5.2% to $391.62. The upgrades price a SpaceX merger that has no agreed terms; the car business underneath just printed a 43% profit decline.
Vincent Jiang · 3 min read
Five sell ratings left on a $1.5 trillion stock
On October 26, bearish calls on Tesla hit their lowest share in more than 11 years 1. Five of 60 analysts still rate the stock a sell, down from 15 of 71 in January 2. That day Barclays+0.68% — Barclays, up 0.68 percent today lifted Tesla+3.60% — Tesla, up 3.60 percent today to Overweight from Equal Weight, raised its target to $450 from $370, and the shares closed up 5.2% at $391.62 31.
One week from blessing to surrender
The clock started October 20, on the earnings call of SpaceX, the rocket and AI company Musk also runs 4. He called a merger "a good idea," said the special committees of the two boards had agreed no terms, and warned the deal needs "a 50 percent vote of all shares," in his words "quite a high hurdle" 4.
Two days later BNP Paribas went from Underperform to Neutral, its $420 target up from $266 on what its analyst said reflects the deal odds "exclusively"; CLSA moved from Underperform to Hold the same day 672. Barclays followed Monday: the combination is "heavily expected" at "some premium" 3. Mizuho went to $460 8. The Inference has covered the deal's proxy math and its $1.53 billion cash beat; new this week is the capitulation itself 8.
The ratings rose while the income statement sank
What the folded bears stopped grading: third-quarter net income of $787 million, down 43% year over year, on flat revenue of $28.05 billion, with operating expenses up 39% 9. The stock trades at 12.3 times trailing sales against 3.2 for the S&P 500, and it lost 12.8% over twelve months while the index returned 15.3% 10. Fortune pegs its price-to-earnings ratio at 633 5.
New targets cleared the stock by $30 to $70 in one week
- 12-month target
- Target before the upgrade
Data
| 12-month target | Target before the upgrade | |
|---|---|---|
| Share price | $391.62 | — |
| BNP Paribas | $420 | $266 |
| Barclays | $450 | $370 |
| Mizuho | $460 | — |
Tesla's quarterly profit fell year over year in eight of the last ten quarters
Data
| GAAP net income | |
|---|---|
| Q2 '24 | $1.4B |
| Q3 '24 | $2.17B |
| Q4 '24 | $2.13B |
| Q1 '25 | $0.41B |
| Q2 '25 | $1.17B |
| Q3 '25 | $1.37B |
| Q4 '25 | $0.84B |
| Q1 '26 | $0.48B |
| Q2 '26 | $1.11B |
| Q3 '26 | $0.79B |
Who pays depends on which shareholders you ask
On the bill, the camps split. J.P. Morgan+0.55% — J.P. Morgan, up 0.55 percent today puts a typical tech premium at 30 to 35%; at 30%, a $2.14 trillion SpaceX+2.15% — SpaceX, up 2.15 percent today would issue stock equal to 92% of its current count for the $1.52 trillion Tesla, cutting SpaceX holders from all of their fast-rising earnings to just over half 5. Fortune's verdict: Tesla owners win, and "the losers will be SpaceX's shareholders" 5.
The precedent is 2016: SolarCity, the last Musk-to-Musk merger, was steered by directors who sat on both boards, and Tesla fell more than 10% the next day 11. The asset on offer bleeds already: SpaceX's AI unit lost $3.3 billion on $10.9 billion of nine-month sales while the company poured $40 billion into AI capital projects 115. Musk owns about 20% of Tesla; the vote needs more than half of all shares 11.
The tell is the exchange ratio
Nothing is scheduled: no terms, no date, no proxy. Musk himself called a done deal "an exaggeration" 2. The fork turns on the exchange ratio the committees publish, then on a shareholder vote Musk's stake cannot carry alone 411. Until a ratio exists, the market trades a term sheet nobody has seen. The last bear did not turn bullish on the cars; he stopped grading them.
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