6 Wall Street Analysts Have Issued Price Targets on SpaceX. Here's the One I Agree With Most.

Space Exploration Technologies (NASDAQ: SPCX) is off and running after a successful initial public offering (IPO) on June 12, which raised close to $86 billion. Not only did SpaceX successfully raise the funds, but the stock popped on the first day of trading and has remained well above its IPO price.

Naturally, Wall Street analysts have begun to weigh in. As of June 16, six analyst reports have come out. Here are all the price targets for the stock so far, and the one I agree with most.

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Wall Street ratings

Wall Street analysts play a critical role in shaping stock prices because they issue earnings projections that are averaged to arrive at consensus estimates. When a company beats consensus estimates or issues guidance above the forward consensus, its stock price tends to perform well.

Analysts also apply multiples to their projections to arrive at 12-month price targets for stocks. So far, six Wall Street analysts have issued price targets on SpaceX:

• KGI Securities initiated coverage with an outperform rating and a $227 price target, the highest issued to date.
• Oppenheimer also initiated coverage with an outperform rating and a $190 price target.
• Wolfe Research initiated coverage of SpaceX with an outperform rating and a $175 price target.
• New Street initiated coverage of SpaceX with no rating and a $165 price target.
• CFRA initiated coverage on SpaceX with a sell rating and $115 price target.
• Morningstar initiated coverage of SpaceX with a sell rating and $63 price target.

On average, these six ratings imply a nearly $156 consensus price target, projecting significant downside from the current price of roughly $208 per share (as of this writing). More analysts will likely release their opinions on the stock and price targets in the coming weeks.

Bull vs. bear

While I couldn't find much information on KGI's note, Oppenheimer analyst Timothy Horan, in his research note, called SpaceX "the only vertically integrated AI company with the required capital, data, LLMs, hardware, manufacturing and engineering talent."

Horan sees a potential $10 trillion addressable market for SpaceX by 2035, but noted that the key for the company is getting data centers into space.

Morningstar is currently the most bearish with a $63 price target. A team led by analyst Nicolas Owens examined three main scenarios for SpaceX: a no go, an MVP, and a moonshot.

The no-go scenario assigns a negative value to the artificial intelligence business, which includes data centers and the Terafab facility the company is planning. The MVP scenario assigns about $23.50 per share of value for AI, while the moonshot scenario assigns close to $108 per share of value for AI.

The AI business has the greatest upside for SpaceX, particularly if it can deploy data centers in space and develop enterprise applications that enable digital workflows through agentic AI. Owens and his team assign a 50% weighting to the middle MVP scenario and a 7% likelihood to the moonshot scenario.

Owens notes that the moonshot scenario, which would value SpaceX at its IPO price of $135 per share, requires a 77% likelihood that the company overcomes engineering challenges and can conduct multiple Starship rocket launches per week.

In this scenario, SpaceX "rapidly scales orbital data centers" to capture a fifth of total AI compute capacity by 2040.

The most likely price target so far

The price target I agree with the most so far is from CFRA analyst Keith Snyder, who assigned the stock a sell rating and a $115 price target.

Snyder's key concerns stem from the business's overreliance on Starship, SpaceX's next-generation rocket that would be fully reusable and could carry heavier loads, allowing the company to deploy Starlink satellites more quickly, as well as launch the infrastructure for orbital data centers.

Snyder wrote in CFRA's note that Starship is still in the process of reaching commercial status for wider deployment.

"This creates a significant execution bottleneck, as delays or technical setbacks in Starship could ripple across nearly every major growth initiative," Snyder wrote, adding that he also has concerns about SpaceX's capital-intensive business model and free cash flow.

I like Snyder's analysis here because it captures the crux of most of SpaceX Founder Elon Musk's businesses.

Investors are always betting on the future and assigning massive multiples to stocks like SpaceX and Tesla, seemingly forgetting to price in the fact that Musk's ambitious plans could fail or run into significant roadblocks.

There's a good chance that it will take many years for SpaceX to launch fully operational data centers in space. Even with Tesla, Musk has been talking about full self-driving for many years, and it's still not fully ready.

That said, I wouldn't pick Morningstar's value rating, even if I agree with the sentiment, because Musk's companies are likely to trade at a significant premium, given investor enthusiasm for what SpaceX is doing and belief in the world's first trillionaire.

Bram Berkowitz has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Tesla. The Motley Fool has a disclosure policy.