Barclays Upgrades Tesla to Overweight, Raises Price Target to $450; Stock Gains 5%
Barclays analyst Dan Levy upgraded Tesla from Equal Weight to Overweight, raising the price target from $370 to $450, citing SpaceX merger prospects and growth in FSD and energy storage. Tesla shares rose approximately 5% on Monday.
US investment bank Barclays upgraded electric vehicle maker Tesla Inc. from Equal Weight to Overweight on October 26, 2026, raising its price target from $370 to $450. The move drove Tesla's stock up more than 5% during Monday's trading session.
Barclays analyst Dan Levy cited the potential merger between Tesla and SpaceX as a primary catalyst for the upgrade. Last week, Tesla CEO Elon Musk confirmed that both companies had established independent committees to explore a combination, although he stressed that an agreement was not certain. Levy argued that the market expectation of a takeover premium for shareholders should drive upside for the stock.
Beyond the merger narrative, Levy pointed to Tesla's third-quarter operational data to support a more positive view of fundamentals. Tesla reported Q3 revenue of $28.05 billion, beating LSEG estimates of $27.88 billion. Adjusted earnings were $0.48 per share, down from $0.50 a year earlier but above Wall Street consensus. However, vehicle deliveries declined 2% to 486,532 units.
Levy expects Tesla's core automotive business to return to growth in 2026, with further improvement in 2027. He highlighted the surge in Full Self-Driving (FSD) subscriptions: FSD users reached 1.74 million at the end of Q3, compared with 1.04 million a year earlier, with over 75% of new North American deliveries including FSD. Additionally, Barclays forecasts that Tesla's energy storage shipments will increase by more than 50% in 2027, driven by data center demand.
Despite these positives, risks remain. If SpaceX merger talks stall or collapse, Tesla's stock may re-rate back to 'no premium' expectations. Current valuation depends on whether automotive operations recover and if autonomous driving, robotics, and energy storage can deliver sustainable growth.