Target Price Up to $800! Wall Street Hails SpaceX as 'The New Railroad and Internet'

With the quiet period following SpaceX's (SPCX-US) initial public offering (IPO) now over, several investment banks have just been cleared to publish research reports on the company—and most hold extremely optimistic views.

Edison Yu of Deutsche Bank wrote in a client report on Tuesday (7th): "In our view, SpaceX represents the pinnacle of human civilization's ambition, an ambition often manifested through steel and fire, bending the arc of history to make humanity a multi-planetary species." He assigned SpaceX a "Buy" rating with a target price of $255 per share.

A team of analysts led by Doug Anmuth at J.P. Morgan stated that SpaceX's "potential impact on humanity" exceeds anything they've seen from any company before. The firm gave SpaceX an "Overweight" rating with a target price of $225 per share.

Brian Gesuale of Raymond James set a target price of $800 per share—the highest on Wall Street so far. Compared to SpaceX's Tuesday closing price of $149.47 per share, this implies a rise of over five times the current level.

Gesuale wrote: "Just as railroads, power grids, and the internet reshaped previous economic eras, we believe SpaceX is building the foundational platform for the next generation of industrial capacity."

Regulations require banks involved in an IPO to wait a period before issuing investment recommendations. SpaceX's historic IPO involved nearly 20 financial institutions, meaning many analysts had to wait before publishing their reports.

According to consensus estimates compiled by FactSet, the average target price for SpaceX is $220 per share.

SpaceX closed Tuesday down 6.8% at $149.47 per share. That day also marked the company's first day of trading inclusion in the Nasdaq 100 Index, which will force passive funds tracking the index to include SpaceX in their portfolios.

Overall, Wall Street's target prices for SpaceX vary widely, and not all analysts believe in extreme upside potential. For example, Stifel set a target price of $190 for the stock, with a "Buy" rating.

Others have taken a different approach. Adam Jonas of Morgan Stanley, a long-time supporter of Musk, initiated coverage on SpaceX with a $300 target price. He also presented both bull and bear scenarios: in a downside case, SpaceX's stock could fall to $75, while in an upside scenario, it could surge to $600.

Jonas said this estimate balances SpaceX's "unique capabilities" against the risks it faces.

SpaceX harbors grand ambitions, including colonizing Mars, operating orbital data centers, and installing a mass driver on the Moon to more easily launch satellites into orbit. However, realizing these blueprints depends on unproven technologies. J.P. Morgan's Anmuth noted that success may require massive capital expenditures and the ability to overcome supply constraints.

Several analysts estimate that SpaceX won't achieve positive free cash flow until at least 2031. Bernstein predicts the company's capital expenditures will reach $245 billion by 2030.

Moreover, SpaceX's plans heavily depend on the refinement of its massive "Starship" rocket, which is still in the testing phase. The next launch is scheduled for later this month and will be the second test of the new version.

Analysts say any delays or setbacks with Starship could hinder the expected growth of SpaceX's various business lines. Jonathan Siegman of Stifel said: "SpaceX's timelines always get delayed—it's a well-known fact."

Nevertheless, Citi's John Godyn noted in a report that if SpaceX succeeds, Starship could enable it to "enter trillion-dollar markets that are effectively inaccessible to other companies." He gave SpaceX a "Buy" rating with a target price of $200, calling it a milestone toward a long-term $900 target.

Despite this, there are still skeptical analysts in the market. According to FactSet data, at least four institutions have assigned the stock a "Hold" rating, with several others giving ratings equivalent to "Sell."

MoffettNathanson's analysts initiated coverage on Tuesday with a "Neutral" rating and a $131 target price—slightly below SpaceX's IPO price—citing the company's complexity. They noted that while "there are many things to criticize," it's hard to ignore SpaceX given its track record and the potential returns from its plans.