"SpaceX, the pinnacle of civilization's ambitions" Investment banks recommend buying... stock plunges

[Financial News]  

Major Wall Street investment banks poured out upbeat views on Elon Musk's SpaceX on the 7th, local time. Some even described it as "the pinnacle of humanity's civilizational ambitions."
However, the stock plunged more than 6%.

According to CNBC, Deutsche Bank said in a note that SpaceX is "the pinnacle of humanity's civilizational ambitions, often described as steel and fire, and a turning point in history."
Bank of America also said SpaceX, the owner of Starlink, a low Earth orbit (LEO) satellite company for high-speed internet, is "laying down a superhighway to the stars."
Raymond James said Starship, SpaceX's new reusable rocket that is still in the testing phase, is "defining the industrial innovation of our generation."
Many of these investment banks were lead underwriters for SpaceX's Initial Public Offering (IPO) on the 12th of last month, and regulations have limited research teams from publishing reports for a certain period. The rule is meant to prevent stock prices from being artificially inflated.
Goldman Sachs, Morgan Stanley, BofA, and JPMorgan were the key lead underwriters, but many other banks also took part in the IPO in smaller roles.
Most of the banks' notes that day were overwhelmingly positive on SpaceX, but there was one firm that issued a negative outlook: MoffettNathanson.

The most optimistic forecast came from Raymond James, which issued a "strong buy" rating and set a 12-month target price of $800. Raymond James said Starship has "successfully industrialized orbital transport."
Deutsche Bank issued a "buy" rating and set a target price of $255. It said SpaceX handled more than 90% of the payload launched into space worldwide last year, adding that Starship is designed to place 100-ton cargo into orbit at a cost of only a few hundred dollars per kilogram, or even less.
Goldman also issued a "buy" rating and set a target price of $205. It placed significant weight on SpaceX's artificial intelligence (AI) business.
JPMorgan issued an "overweight (buy)" rating and a target price of $225. It said AI is a long-term growth driver.
Cantor Fitzgerald gave an "overweight" rating with a target price of $246, while Stifel issued a "buy" rating with a target price of $190.
Wells Fargo also set a target price of $230, along with an "overweight" rating.

Among the investment banks, only MoffettNathanson offered a bearish outlook.
MoffettNathanson issued a "neutral" rating and a target price of $131.
In its note, the analyst team said SpaceX's nearly $30 trillion total addressable market (TAM) estimate is "absurd." It also said the outlook for the mobility segment is "overstated" and amounts to little more than a niche market.
MoffettNathanson also said that founder and CEO Musk has said he wants to secure orbital computing capacity at a rate of 100 gigawatts (GW) a year by the end of 2029, but that would exceed the scale of data centers currently operating worldwide. It added that securing enough resources for that within three and a half years is impossible.
At the time the note was written, there was no credible financial model to support a valuation of about $2 trillion, MoffettNathanson said.
SpaceX closed at $160.42 the previous day, putting its market cap at $210 billion. But on the 7th, after the flood of upbeat notes, it plunged $29.82, or 6.35%, to close at $150.24.
dympna@fnnews.com Song Kyung-jae Reporter