Barclays Just Upgraded Tesla Stock. Here's Why.

Barclays’ senior analyst Dan Levy believes Tesla (TSLA) shares are worth buying after Elon Musk hinted at the electric vehicle (EV) maker’s potential merger with SpaceX (SPCX) on the latter’s recent earnings call. In a research note this morning, Levy upgraded TSLA to “Overweight” and raised his price objective to $450, indicating potential upside of about 13% from current levels. 

Tesla stock has already been in a sharp uptrend in recent months, currently trading more than 30% above its price in late July. 

Why Barclays Upgraded Tesla Stock

Levy recommends betting on Tesla’s potential merger with SpaceX given both firms have already formed committees to explore a potential combination. 

He’s convinced that such a transaction will likely value the EV stock at a premium, which makes it rather attractive at its current price-to-sales (P/S) multiple of about 15x. 

Even from a technical perspective, TSLA shares look positioned for continued gains ahead. At the time of writing, they are trading firmly above their major moving averages (MAs), with an RSI in the early 60s indicating significant room before the company hits overbought levels. 

What Else Could Drive TSLA Shares Higher?

Crucially, Barclays expects Tesla’s core business to help unlock its stock price as well. 

“The auto business is on track to grow this year after two years of declines — and 2027 should see further upside, supported by demand spurred by FSD and rising exports from Giga Shanghai,” the analyst told clients. 

Thanks to robust data center demand, Tesla's energy business is already sold out for 2027, and the investment firm expects that to drive more than 50% growth in shipments over the longer term.

The final pillar of Levy’s bullish view on Tesla shares is the company’s robotaxi business that he’s convinced is strongly positioned to go up against Waymo. 

How Wall Street Recommends Playing Tesla

Other Wall Street analysts are not nearly as bullish on TSLA stock, though. 

According to Barchart, while the consensus rating on the EV maker sits at “Moderate Buy,” the mean price target of about $409 suggests potential upside of less than 5%.  

On the date of publication, Wajeeh Khan did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.