TSLA Stock Back To $400? Jefferies Lays Out Bull Case, Says ​​SpaceX Merger Could Hand Shareholders A Premium

• The brokerage raised Q2 EBIT to $1.45 billion but still expects a $7.5 billion free cash flow outflow.

• Jefferies said that a Tesla-SpaceX merger could leave room for a shareholder premium, with Musk retaining 55.3% voting control.

• Tesla's Semi will enter a pilot in Chicago with Paper Transport to test its 500-mile range in colder conditions.

Shares of Tesla, Inc. (TSLA) rose 0.2% in overnight trading late Monday as Jefferies raised its price target and said that a potential SpaceX merger could leave room for a shareholder premium.

TSLA stock fell 3% on Monday, snapping two straight sessions of gains.

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Jefferies Lifts TSLA Outlook Ahead Of Q2 Earnings

Jefferies raised its Tesla price target to $400 from $375 while maintaining a 'Hold' rating, implying a modest 1% upside from current levels. The firm cited Tesla's "significant auto volume beat" after the company delivered 480,100 vehicles in the second quarter, well above the consensus estimate of 406,000. Model 3 and Model Y vehicles accounted for 467,800 deliveries. The brokerage said that the strength in China and Europe validated the "unique value proposition of Tesla vehicles," even as the broader auto industry faces a growing risk of commoditization.

The brokerage also said that Tesla's multi-year deterioration in growth and earnings had started to reverse. Jefferies raised its second-quarter (Q2) earnings before interest and taxes (EBIT) forecast to $1.45 billion, representing a 5.1% margin, and increased its longer-term EBIT estimates by about 6%. Tesla is set to report its Q2 earnings on July 22.

The firm now expects automotive revenue of $21 billion, including $250 million from zero-emission vehicle credits and $500 million from leasing. Group revenue and EBIT are projected at $28.7 billion and $1.45 billion, respectively. For fiscal 2026, Jefferies raised its EBIT estimate by 4% to $6.2 billion, partly reflecting stronger volumes and the higher-priced long-wheelbase Model Y.

Jefferies also expects Q2 capital spending of $6.9 billion, leaving Tesla with $41.7 billion in liquidity. Deliveries running ahead of production should also provide a near-term cash-flow benefit by reducing inventory.

However, Jefferies maintained its forecast of about $7.5 billion in free cash flow outflows, including $23 billion in capital expenditures. It also struck a cautious note on autonomy, saying low implied Cybercab production pointed to further delays in Tesla's robotaxi ramp.