Barclays upgrades Tesla to Overweight, citing SpaceX merger as key catalyst

Barclays analyst Dan Levy upgraded TSLA to Overweight from Equal Weight before the open on Monday, Oct. 26, and raised his price target to $450 from $370. Levy cited a potential merger with SpaceX as a key part of the bull case, alongside stronger core business trends and early signs of a Robotaxi inflection, according to an Investing.com report. The new target implied about 21% upside from Friday's close, CNBC noted.

The stock responded quickly. Shares were up about 2% in premarket trading and jumped about 6% during the session; SentiSense's delayed quote showed $391.62, up 5.2%, late in the day. It was the only rating upgrade on Tesla in the past week: after Tesla's Q3 report, UBS and JPMorgan reiterated Neutral and Morgan Stanley stayed at Equal-Weight, per SentiSense analyst data.

The merger itself is still a possibility rather than a deal. Both companies have formed special committees, and Musk confirmed the step last week, but there are no terms yet. Levy had already said on Oct. 15 that an announcement could come before December; today's call moves that view into his rating. Any combination would also need a Tesla shareholder vote.

Not everyone reads a merger as a win for Tesla holders. Scott Galloway, quoted in a TIKR analysis, framed it as a rescue, saying "Tesla's the patient and SpaceX is the organ donor". The piece notes Tesla's normalized earnings per share fell from $3.12 in 2023 to $1.66 in 2025, while the stock traded at about 175 times forward earnings at Friday's close against a three-year average of 135 times. What to watch: whether the special committees produce terms, how any exchange ratio splits value between the two shareholder bases, and whether other brokers follow Barclays in pricing the deal into their targets.