MoffettNathanson initiated coverage of SpaceX with a neutral rating and a $131 price target on Tuesday, implying around 18% downside from the stock's Monday close of $160.42. The firm stated that no conventional valuation model supports SpaceX's roughly $2 trillion market capitalization and questioned several of the company's long-term growth assumptions. The neutral stance contrasted sharply with bullish coverage from Deutsche Bank, Bank of America, Raymond James, Wells Fargo, Morgan Stanley, and Goldman Sachs, whose price targets ranged from $205 to $300, implying upside between 28% to 87%. SPCX stock was down 5.6% in Tuesday afternoon trading.
MoffettNathanson Issues Neutral Rating With $131 Price Target
MoffettNathanson initiated coverage of SpaceX with a neutral rating and a $131 price target, implying around 18% downside from SpaceX's Monday close of $160.42. The firm stated in a note to clients that "it would be easy -- some might argue prudent -- to initiate coverage with a flashing red Sell rating." The analyst stated that traditional valuation models fail to justify the premium investors are assigning to SpaceX's dominance in rocket launches, adding that "there is simply no credible financial model" that supports the company's current valuation.
The firm stopped short of a bearish rating, saying investors are pricing in businesses SpaceX is yet to build. MoffettNathanson said its neutral rating may be more generous than warranted. Despite its skepticism, the analyst said SpaceX's "enormous moat and undeniable flywheel" make its current valuation "perhaps not entirely unreasonable after all."
MoffettNathanson Questions SpaceX's Long-Term Projections
MoffettNathanson challenged many of SpaceX's long-term projections. The firm described the company's nearly $30-trillion estimate for its total addressable market as "absurd" and questioned forecasts for direct-to-device wireless services. The firm said Elon Musk's goal of deploying 100 gigawatts of compute capacity into orbit annually by the end of 2029 would exceed today's global installed data-center capacity and require material inputs that are unlikely to exist by then.
The firm added that the bigger long-term risk is potential regulatory scrutiny of SpaceX's dominance in launch services, though it believes that threat is still years away.
Wall Street Firms Issue Bullish Ratings With Price Targets Up To $300
Deutsche Bank initiated coverage of SpaceX with a Buy rating and $255 price target, implying an upside of nearly 59% from the stock's last close. Wells Fargo initiated coverage with an Overweight rating and a $230 price target, implying over 43% upside from Monday's close. Morgan Stanley started coverage with an Overweight rating, setting a $300 price target that suggests about 87% upside. Goldman Sachs initiated coverage with a Buy rating and a $205 price target, implying around 28% upside.
FAQ
What price target did MoffettNathanson set for SpaceX stocks?
MoffettNathanson initiated coverage with a neutral rating and a $131 price target, implying around 18% downside from SpaceX's Monday close of $160.42.
Which Wall Street firms issued bullish ratings on SpaceX stocks?
Deutsche Bank, Bank of America, Raymond James, Wells Fargo, Morgan Stanley, and Goldman Sachs initiated coverage with bullish ratings. Price targets ranged from $205 (Goldman Sachs) to $300 (Morgan Stanley), implying upside between 28% to 87%.
Why did MoffettNathanson question SpaceX's valuation?
MoffettNathanson stated that no conventional valuation model supports SpaceX's roughly $2 trillion market capitalization. The firm described the company's nearly $30-trillion total addressable market estimate as "absurd" and questioned Elon Musk's goal of deploying 100 gigawatts of compute capacity into orbit annually by the end of 2029.
