Jefferies raised its price target for Tesla, Inc. (TSLA) stocks to $400 from $375 on Monday, citing the company's second-quarter delivery beat of 480,100 vehicles against a consensus estimate of 406,000. The brokerage maintained a Hold rating and said a potential merger with SpaceX could leave room for a shareholder premium, with Elon Musk retaining 55.3% voting control under a nil-premium structure. Tesla stocks fell 3% on Monday but rose 0.2% in overnight trading late Monday. The price target adjustment follows Tesla's multi-year deterioration in growth and earnings starting to reverse, according to Jefferies. The debate over a Tesla-SpaceX merger has evolved from retail speculation to institutional analysis, with JPMorgan recently calling such a combination strategically coherent on paper.
Jefferies Raises Tesla Stocks Price Target Ahead of Q2 Earnings
Jefferies raised its Tesla price target to $400 from $375 while maintaining a Hold rating, implying a modest 1% upside from current levels. The firm cited Tesla's significant auto volume beat after the company delivered 480,100 vehicles in the second quarter, well above the consensus estimate of 406,000. Model 3 and Model Y vehicles accounted for 467,800 deliveries. The brokerage said the strength in China and Europe validated the unique value proposition of Tesla vehicles, even as the broader auto industry faces a growing risk of commoditization.
Jefferies raised its second-quarter (Q2) earnings before interest and taxes (EBIT) forecast to $1.45 billion, representing a 5.1% margin, and increased its longer-term EBIT estimates by about 6%. Tesla is set to report its Q2 earnings on July 22. The firm now expects automotive revenue of $21 billion, including $250 million from zero-emission vehicle credits and $500 million from leasing. Group revenue and EBIT are projected at $28.7 billion and $1.45 billion, respectively. For fiscal 2026, Jefferies raised its EBIT estimate by 4% to $6.2 billion, partly reflecting stronger volumes and the higher-priced long-wheelbase Model Y.
Jefferies expects Q2 capital spending of $6.9 billion, leaving Tesla with $41.7 billion in liquidity. Deliveries running ahead of production should provide a near-term cash-flow benefit by reducing inventory. However, Jefferies maintained its forecast of about $7.5 billion in free cash flow outflows, including $23 billion in capital expenditures. The firm struck a cautious note on autonomy, saying low implied Cybercab production pointed to further delays in Tesla's robotaxi ramp.
Tesla-SpaceX Merger Thesis Draws Institutional Analysis
The debate over a potential Tesla-SpaceX merger has evolved beyond retail speculation. What began as prominent retail investors modeling ownership structures and exchange ratios has drawn institutional attention, with firms such as Jefferies and JPMorgan publishing analytical frameworks that examine voting control, governance implications, and potential merger-premium structures.
Jefferies said it continues to see logic in merging Tesla with Elon Musk's privately held space company. Under a nil-premium deal, Musk would retain an estimated 55.3% voting stake in the combined entity. The structure, Jefferies said, could leave room for Tesla shareholders to receive a premium. JPMorgan recently called a Tesla-SpaceX merger strategically coherent on paper, pointing to potential integration across AI, robotics, energy, transportation and space. It maintained a Neutral rating.
Tesla Semi Enters Chicago Pilot Program with Paper Transport
Tesla's Semi is entering a pilot program with Wisconsin-based Paper Transport. Paper Transport will test the long-range truck in dedicated Chicago operations, giving Tesla another opportunity to assess its performance in colder temperatures and snow-heavy conditions. The configuration offers about 500 miles of range and is priced at $290,000. Tesla has previously conducted Semi fleet trials with PepsiCo and Frito-Lay.
So far this year, Tesla's stock has lagged its Magnificent Seven peers, making it the group's second-worst performer, down 12%.
FAQ
What price target did Jefferies set for Tesla stocks?
Jefferies raised its Tesla price target to $400 from $375 while maintaining a Hold rating.
When will Tesla report its Q2 earnings?
Tesla is set to report its Q2 earnings on July 22.
What is the Tesla-SpaceX merger thesis proposed by Jefferies?
Jefferies said a nil-premium merger between Tesla and SpaceX could leave room for Tesla shareholders to receive a premium, with Elon Musk retaining an estimated 55.3% voting stake in the combined entity.
