SpaceX stocks closed at $139.14 on July 13 local time, down 4.24% and approaching its $135 IPO price, one month after first trading at $150. Bank of America senior analyst Ron Epstein issued a 'buy' rating with a $235 target price last week, citing the company's space launch leadership as the primary rationale. The target price was derived from a long-term discounted cash flow model extending through 2045, incorporating base, upside, and downside scenarios.
BofA Analyst Sets $235 Target on Launch Leadership
Ron Epstein, a senior analyst at Bank of America who has worked in the aerospace sector, presented space launch leadership as the foundation for his buy recommendation. According to Yahoo Finance, Epstein became the most recent bull on the stock with his rating issued last week. He also cited orbital data centers as part of his investment thesis, describing them as "distributed orbital computing" rather than large objects floating in space loaded with thousands of GPUs. "I haven't met anyone in the engineering industry I trust who says 'this is impossible, it's an engineering challenge,'" Epstein stated.
Launch Cost Economics Drive Investment Thesis
Epstein acknowledged that the overall buy case stems from launch economics. Launch costs previously ranged from $10,000 to $20,000 per kilogram, but Falcon 9 currently achieves costs in the $2,000 range and Falcon Heavy reaches $1,000 per kilogram. Epstein projected that when Starship achieves full reusability, costs could drop to $50-100 per kilogram. "The reduction in launch costs is like a new railroad to markets people never thought of, like a superhighway to the stars," Epstein said, adding that "in 10 years, SpaceX will be in a very different position."
Orbital Data Center Technology Feasibility
Epstein used Starlink as a precedent, explaining that more than 10,000 interconnected satellites form "effective laser internet in space" that skeptics once considered unfeasible. He characterized cooling and power as merely engineering problems, noting that "this company is a very excellent engineering company." Yahoo Finance reported that the breakthrough advancement would be securing reusability of the second-stage booster, a problem the Space Shuttle never properly solved due to excessive repair and maintenance requirements after each flight.
Starship Test Flight Scheduled July 16
The 13th test flight of Starship is scheduled for July 16. Epstein stated he does not expect the milestone to be achieved in this test flight but wants to see progress in the right direction. Regarding SpaceX's bond issuance after going public, Epstein expressed no concern, stating "if they prove success from an engineering standpoint, I'm not particularly worried about that part."
Capital Requirements and Shareholder Dilution Concerns
Pessimists identify capital raising as a major issue, noting that SpaceX requires approximately $84 billion in annual new capital, with particular concerns about potential shareholder dilution. Yahoo Finance reported that SpaceX is expected to release second-quarter earnings in early August, with important numbers to be confirmed excluding Starship launches.
FAQ
What was SpaceX's stock price on July 13?
SpaceX stocks closed at $139.14 on July 13 local time, down 4.24% from the previous day. The stock first traded at $150 one month ago, and the IPO price was $135.
What is Bank of America's target price for SpaceX stocks?
Bank of America senior analyst Ron Epstein issued a $235 target price with a 'buy' rating last week. The target price was derived from a long-term discounted cash flow model through 2045.
When is SpaceX's next Starship test flight scheduled?
The 13th test flight of Starship is scheduled for July 16. Analyst Ron Epstein stated he does not expect the reusability milestone to be achieved in this test but wants to see progress in the right direction.
