BNP Paribas analysts warn that a potential Tesla-SpaceX merger is unlikely to rescue Tesla investors in the near term due to significant cash burn at both companies and regulatory hurdles. The firm maintains an underperform rating and a $280 price target on Tesla, well below its recent closing price of $407.76. SpaceX is projected to burn $216 billion from 2026 to 2031, while Tesla faces a multi-year burn cycle starting this quarter, with capital expenditures expected to average up to $23 billion annually through 2030. Even if a merger occurs, a 30% to 40% takeout premium would only imply a fair value of $360 to $390 per share, and assigning a 50% probability cuts that range to $320 to $335, still below current levels. Additionally, the combined entity's sharply negative cash flow would likely dilute current Tesla shareholders.
Tesla IncBNP Paribas maintains underperform rating and $280 price target, citing cash burn and regulatory hurdles; merger would not rescue near-term value.
Space Exploration Technologies Corp. Class A Common StockSpaceX projected to burn $216 billion from 2026 to 2031, making merger unattractive for Tesla investors.
BNP Paribas SA