On 7 July, SpaceX (NASDAQ: SPCX) stock joined the Nasdaq 100 index. This means that going forward, the space stock is going to see forced buying via passive index inflows.
Do Wall Street analysts see the stock going higher after this milestone? You bet they do. Here’s a look at the latest share price forecasts for the space powerhouse.
Wall Street’s bullish on SpaceX
Since 7 July, numerous Wall Street firms have posted price targets for SpaceX. And some of these targets are very bullish, to say the least. The highest target’s $800, which is a whopping 430% higher than the share price today. That’s from analysts at Raymond James.
Behind that, Morgan Stanley has a target of $300, around double the current share price.
Then, we have a ton of firms with price targets ranging $200-$260. Names here include:
- Deutsche Bank: $255
- Canaccord: $246
- BofA Securities: $235
- Mizuho: $200
- JP Morgan: $200
- Citi: $200
- Wells Fargo: $230
- RBC Capital: $225
- UBS: $210
- Bernstein SocGen: $239
- Goldman Sachs: $205
The average price target’s currently about $239. That’s around 60% higher than the current share price.
Here’s my medium-term price target
Personally, I’m not so bullish on SpaceX. My medium-term target is a fair bit lower than all of the prices mentioned above. Don’t get me wrong – I see SpaceX as an amazing company. It’s a leader in the space industry by a wide margin and it deserves a premium for scarcity value.
It’s also growing at a spectacular rate. This year, revenue is forecast to hit $36.3bn versus $18.7bn last year.
But crunching the numbers, I can’t get to a share price of $200 in the short term. For me, the maths don’t work.
Let’s take that $36.3bn revenue forecast I mentioned above. Now, let’s be generous and stick to its 30 times sales multiple. That gives us a market-cap of around $1.1trn, which translates to a share price of around $80. That’s almost 50% below the current share price.
Now, I don’t know if the stock will fall to that level in the short term, but I wouldn’t be surprised to see it retreat to near $100. After all, insiders and long-term investors will be able to sell a ton of shares soon and this could put pressure on the share price.
Meanwhile, we have other big IPOs coming up and investors may sell here to raise capital.
What about the long term?
I’ll point out that taking a longer-term view, I’m more bullish on the stock. If revenues rise explosively in the years ahead as many investors expect, I could see the stock rising to $250.
However in the near term, I think there’s a decent chance it will go lower. So for those considering adding the space stock to their portfolios, I think it could be worth waiting.
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Edward Sheldon owns shares in Nasdaq and JP Morgan
