Jefferies has reduced its price target on Tesla (NASDAQ:TSLA) to $375 and identified what it sees as an emerging structural risk for shareholders: the possibility that expectations surrounding a future combination with SpaceX (NASDAQ:SPCX) could cause Tesla shares to increasingly trade as a proxy for SpaceX.
The brokerage argues that growing investor belief in a potential merger between the two companies may begin to influence Tesla’s valuation independently of its own business performance.
Merger Expectations Could Alter Tesla’s Valuation Dynamics
Following the highly anticipated SpaceX initial public offering, Jefferies examined how investor perceptions of the relationship between Tesla and SpaceX are evolving.
While Tesla shares avoided significant weakness ahead of the SPCX listing, the firm noted that market expectations for a future tie-up between the companies are becoming more widespread.
According to Jefferies, “consensus that a merger will be next and soon may turn TSLA into a tracker as shareholders try to minimize stake dilution.”
If investors increasingly value Tesla based on SpaceX-related expectations, the bank believes Tesla’s share price could become less tied to its own operating performance and more influenced by developments at SpaceX.
The revised $375 target implies approximately 6% downside from current trading levels.
Analysts See Disconnect Between Valuation and Fundamentals
Jefferies remains cautious on Tesla’s near-term outlook, arguing that current market expectations are not fully aligned with operational realities.
The firm summarized its position by stating: “Valuation & estimates remain disconnected.”
According to the analysts, this gap between investor optimism and underlying business performance is unlikely to be resolved quickly and may continue to create volatility for the stock.
Robotaxi and Humanoid Investments Could Weigh on Earnings
A key difference between Jefferies’ forecasts and broader Wall Street expectations relates to Tesla’s next-generation businesses.
The brokerage projects results below consensus estimates because it believes the rollout of robotaxis and humanoid robots will initially be loss-making rather than immediately profitable.
As Jefferies explained, it is “assuming launching robotaxis & humanoids will initially create loss centres” rather than generate significant earnings in the early stages of deployment.
This view contrasts with the more optimistic assumptions embedded in many analyst forecasts, which anticipate these businesses becoming major contributors to revenue growth.
Long-Term Potential Remains Intact
Jefferies does not challenge the long-term opportunity presented by autonomous mobility and humanoid robotics.
However, the firm argues that investors may be overlooking the substantial investment phase required to build those businesses and the pressure such spending could place on profitability in the near term.
Much of Tesla’s premium valuation compared with traditional automotive manufacturers has been supported by expectations that robotaxi services and humanoid robots will eventually generate high-margin, scalable revenue streams.
While Jefferies acknowledges that potential, it believes the market is underestimating the costs and execution challenges likely to arise before those opportunities become meaningful profit contributors.