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JPMorgan reiterated its “Underweight” rating and bearish price target for Tesla stock on Monday.
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Analyst Ryan Brickman predicts shares are headed for a 60% drop through the end of 2026.
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Central to the firm’s bearish view is the fact that unsold inventory of Tesla cars has hit a record.
JPMorgan is telling Tesla investors to brace for pain.
Tesla kicked off April with a disappointing first-quarter deliveries report. The electric car company sold 358,000 vehicles, 4% below analyst consensus and 7% lower than JPMorgan’s 385,000 delivery forecast.
The deliveries data prompted analyst Ryan Brinkman to reiterate his team’s “Underweight” rating for the automaker and $145 price target for the stock through year-end. That would mark a 60% drop from Monday’s levels.
A record level of unsold inventory is central to the firm’s bearish view.
“Record surge in unsold vehicles adds to free cash flow woes,” he wrote. “Tesla produced +50,363 more vehicles than it delivered in 1Q26, signifying a larger inventory build than in any prior quarter.”
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Tesla’s latest sales numbers also came in below UBS’ estimate of 345,000 deliveries. The investment bank maintained a Sell rating on Tesla stock on March 19, when it issued its own bearish forecast.
Brinkman noted that Tesla’s production has increased 80% since the first quarter of 2023, but the company is selling 15% fewer cars during that time.
The analyst also said that even though Tesla’s delivery volumes peaked in early June 2022, the share price has jumped about 50% since then. The disconnect between the stock price and recent performance suggests that Wall Street is pricing in a narrative that hasn’t yet played out, with investors pinning their hopes on initiatives like robotaxis and humanoid robotics while car sales decline.
JPMorgan thinks investors should remain cautious about the stock.
“With expectations for Tesla performance having collapsed for all financial and performance metrics across all time periods through the end of the decade, the +50% rise in TSLA shares and +32% increase in analyst price targets as this collapse has taken place implies an expectation for a sharp pivot to materially better than earlier expected performance in the time beyond this decade,” Brinkman said.
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