IMPORTANT DISCLAIMER

This is not financial advice. This post is for educational purposes only. It is not a recommendation to buy, sell or hold TSLA, SPCX or any other security. Do your own research and talk to a licensed financial advisor before making investment decisions. Investing involves risk, including the possible loss of the money you invest.

9to5investing: "Tesla Stock at $344? The SpaceX Merger Math Just Broke (TSLA)". Facts on this page cite the primary sources below, not the video.

The claim: Wall Street just turned on Tesla.

The proof: One firm trimmed its number. On Tuesday, Nov. 10, Jefferies cut its Tesla price target to $375 from $400 and kept its Hold rating, Reuters and CNBC reported. The note's key line, quoted by CNBC: "Post US mid-terms, the rationale for merging TSLA & SPCX is unchanged, but probably more challenging to implement." Reuters said the new target sat 0.8% below Tesla's last close. Tesla then closed Tuesday at $379.78, up 0.46%, a little above the new target.

Editorial Thesis

This is a small cut with a big topic attached. Jefferies isn't saying Tesla is broken. It's saying the Tesla-SpaceX merger idea, which helped lift other analysts' targets in October, got harder to pull off after the midterms. For a learner, the lesson is to separate the rating (unchanged Hold), the target (down $25) and the story the analyst is telling (merger harder, cash flow solid).

Honest Verdict

  • Confirmed (Reuters, CNBC, TipRanks): Jefferies, analyst Philippe Houchois, Hold rating kept, target $375 from $400, Nov. 10.
  • Confirmed (Yahoo Finance chart data): TSLA closed $378.05 on Nov. 9 and $379.78 on Nov. 10.
  • Analyst opinion: the merger case is "unchanged" but "probably more challenging to implement"; Q3 showed "the relative strength of underlying FCF."
  • Not a fact: any merger plan. No Tesla-SpaceX deal or terms have been announced.

The numbers in one place

ItemFigureSource
Jefferies target$400 → $375Reuters, CNBC, TipRanks
Jefferies ratingHold (unchanged)Reuters, TipRanks
Gap to Nov. 9 close0.8% belowReuters
TSLA close, Nov. 9$378.05Yahoo Finance
TSLA close, Nov. 10$379.78 (+0.46%)Yahoo Finance
Median target, 48 analysts$422.50Reuters (LSEG data)
Year to datedown about 16%Reuters

Jefferies had raised its target to $400 in mid-October, ahead of Tesla's Q3 report. Tuesday's move reverses part of that raise.

What Jefferies is actually saying

Three things, in plain English:

  1. The merger logic hasn't changed. Jefferies still sees a reason to combine Tesla and SpaceX.
  2. Doing it got harder. After the Nov. 3 midterms, the firm thinks a deal is "probably more challenging to implement." The note excerpts didn't spell out why. Our Nov. 6 post covered how both stocks fell after the election.
  3. Cash flow is the strength. Jefferies said Q3 showed "the relative strength of underlying FCF" (free cash flow), which it called critical for Musk's wider spending plans. Reuters added that Jefferies sees Tesla's non-car businesses moving in the right direction but still too small and too far off to change the results yet.

How this fits with other analysts

Jefferies is one of about 48 analysts Reuters counts on Tesla. The median target is $422.50, well above $375. Barclays' $450 target in late October was built partly on an expected merger "with expectation for some premium," as we covered on Oct. 28. Jefferies is now leaning the other way on that same idea. Neither view is a forecast you can count on.

What this does not prove

  • It does not prove Tesla's stock will fall to $375. A target is a 12-month opinion.
  • It does not prove a merger is off. No deal had been announced in the first place.
  • It does not mean Wall Street turned on Tesla. One firm cut by $25 and kept the same rating.
  • It is not the Nov. 5 selloff story or the Barclays upgrade. Those were covered already.

What to watch next

  1. Whether other brokers change targets or ratings and mention the merger.
  2. Any Tesla or SpaceX filing, or Musk post, that addresses a combination.
  3. Tesla's next delivery report and SpaceX's Dec. 8 lock-up expiry, which can move both stocks.

Bottom Line

On Nov. 10, Jefferies cut its Tesla price target to $375 from $400, kept Hold, and said a Tesla-SpaceX merger is probably harder to carry out after the midterms. Tesla closed at $379.78 that day, just above the new target. It's one analyst's opinion. This is not financial advice.

Source notes

Reuters (via Boursorama, in French; translated by us) and CNBC's Nov. 10 analyst-calls roundup for the target, rating and note quotes; TipRanks via Business Insider for the analyst's name. TSLA prices are regular-session closes from Yahoo Finance chart data, read Nov. 11 at about 5 AM ET; refresh if publishing slips past Nov. 11. Jefferies' mid-October raise to $400 is from our Oct. 15 post's sourcing. Video: 9to5investing (Nov. 6) is background on the merger math after the midterms; it predates the Jefferies note.

Sources