Baird sees Tesla-SpaceX merger within 12 to 18 months

Investing.com -- Baird maintained its Outperform rating on Tesla Inc on Tuesday with a $522 price target, as analyst Ben Kallo outlined delivery expectations and discussed the possibility of a merger with SpaceX following the space company's recent initial public offering.

SpaceX completed its IPO on Friday, June 12, raising approximately $86 billion through the sale of 638.9 million shares at $135 each. The stock has since risen about 15% while the S&P 500 remained flat, bringing SpaceX's market capitalization to $2.4 trillion. Combined, Elon Musk's two largest companies now represent an equity value of $3.9 trillion.

Baird estimates a Tesla-SpaceX merger will likely occur within 12 to 18 months. The firm expects a waiting period as SpaceX integrates its recent xAI merger and establishes itself as a public company. Musk's recent comments and the fast-paced culture of both companies suggest steps to initiate the merger process may begin soon.

The analyst cited several reasons supporting a merger, including Musk's own statements that the two companies will likely merge, the need for multiple board approvals for large intercompany transactions, shared engineering talent, greater vertical integration for resources such as raw materials and compute, and standard operational synergies.

Baird does not expect significant regulatory scrutiny given limited overlap of end markets between the two companies.

For Tesla-specific developments, the firm highlighted upcoming catalysts including the next-generation vehicle unveiling and start of production for Optimus, greater adoption of Full Self-Driving technology from European Union regulators, robotaxi entering new U.S. markets, Tesla Semi rollout, and new Energy business products.

Baird expects Tesla to report second-quarter deliveries on Thursday, July 2, before market open. The firm's delivery estimate stands at 392,900 vehicles for the second quarter versus consensus of 401,100. For the full year 2026, Baird projects 1.68 million deliveries compared to consensus of 1.66 million.

You May Also Be Interested In

• Chevron signed an agreement with Iraq's Basra Oil Company to advance commercial negotiations for West Qurna 2
• Newmark wins 21M+ sq ft management deal with 601W Companies
• Tesla (TSLA) call put ratio 1 call to 1 put