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SpaceX Falcon 9 Launch A 'Major Shot In The Arm' For Tesla Brand, Analyst Says

Wayne Duggan

Tesla Inc (NASDAQ: TSLA) shares traded higher by 5.8% on Monday following a successful launch by CEO Elon Musk’s other company, SpaceX.

While Tesla and SpaceX have only loose financial ties, one analyst says SpaceX is contributing value to Tesla’s brand.

The Tesla Analyst

Wedbush analyst Daniel Ives reiterated a Neutral rating and $800 price target for Tesla.

The Tesla Thesis

On Saturday, SpaceX became the first private company to successfully launch NASA astronauts into space when the company’s Falcon 9 rocket took off from Kennedy Space Center in Florida.

“While SpaceX and Tesla are separate companies despite some R&D cross pollination in some key areas, from a consumer perspective the Musk DNA remains the linchpin to both of these next generation technology stalwarts and we would characterize the historic success of SpaceX as another major shot in the arm to the Tesla brand,” Ives wrote in a Monday note.

Ives said Tesla appears to be on track to easily deliver more than 500,000 vehicles in 2021 driven in large part by its expansion into China. Tesla’s Fremont factory recently reopened after being shut down for two months due to the COVID-19 outbreak, as investors are preparing for some brutal second-quarter numbers given the impact on the global auto market.

'Million Mile Battery'

However, Ives says Tesla may also have bullish catalysts ahead in the near-term given the company could be making some major announcements regarding its battery business.

Ives is predicting Tesla is close to unveiling the “million mile battery,” a battery that could potentially last for decades and withstand all types of weather and terrain.

Last week, Mark Spiegel of Stanphyl Capital told Benzinga there should be no connection between SpaceX an Tesla’s share price.

"Seeing as there's no meaningful financial connection whatsoever between the business of Tesla and the business of SpaceX (other than what Musk might happen to steal from one to the other), there should be no reaction in $TSLA stock regardless of what happens with the launch," Spiegel told Benzinga.

Benzinga’s Take

Although Ives had nothing but good things to say about Tesla and Musk, his rating on the stock is Neutral and his price target is about 9.5% below Tesla’s current stock price. However, Tesla investors don’t seem to care at all about the stock price given the Tesla is even trading significantly higher than it was a month ago when Musk tweeted Tesla’s stock price is “too high imo.”

Do you agree with this take? Email feedback@benzinga.com with your thoughts.

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Latest Ratings for TSLA

Date Firm Action From To
May 2020 Daiwa Capital Initiates Coverage On Outperform
May 2020 Wedbush Maintains Neutral
May 2020 JMP Securities Maintains Market Outperform

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