Jefferies Lowers Tesla Target to $375, Flags 6% Downside
Jefferies has reduced its price target for Tesla Inc (NASDAQ:TSLA) to $375, which represents roughly a 6% downside from the stock's current trading level. The brokerage highlighted a new structural risk: a growing market consensus that a merger between Tesla and SpaceX (NASDAQ:SPCX) could effectively turn TSLA shares into a de facto SpaceX tracking stock, causing price discovery to become untethered from Tesla's own operating fundamentals.
While Tesla shares did not experience a sell‑off ahead of the recent SpaceX IPO, Jefferies noted that investors may view a merger as a way to minimize stake dilution, thereby increasing the likelihood of TSLA acting as a proxy for SpaceX performance. The firm described the current valuation as disconnected from estimates and expressed doubt that this tension will resolve cleanly in the near term.
In its earnings outlook, Jefferies assumes that the launch of robotaxi services and humanoid robots will initially generate losses rather than profits, leading to below‑consensus results for the coming years. The brokerage argues that the market is overlooking the near‑term investment phase and the associated losses, even though it acknowledges the long‑term upside potential of these businesses.