HSBC Initiates Coverage on SpaceX With Hold Rating and Lower Price Target
On July 24, 2026, HSBC initiated coverage on Space Exploration Technologies (SPCX) with a 'hold' rating and set a $115 price target. This is below the stock's recent closing price of $118.24 and significantly under its June IPO price of $135. The bank reached this valuation by segmenting SpaceX’s business units, adding an innovation premium based on Elon Musk’s track record, yet still arrived at a number that suggests the market may be overvaluing the stock. HSBC expects revenue to more than double in 2026 but forecasts continued GAAP losses through 2027 and negative free cash flow until around 2030. The bank estimates SpaceX will burn approximately $106 billion before achieving positive free cash flow, raising concerns for investors about long-term returns. The report also questions the viability of SpaceX’s AI business following its acquisition of xAI in February 2026 and doubts whether Starlink's addressable market is as large as claimed by the company. These factors contribute to HSBC treating a $293 price target—based on optimistic scenarios—as unlikely.
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Topics: HSBC market sentiment SpaceX stock valuation