JPMorgan (JPM) is looking for Tesla’s (TSLA) stock to lose a good amount of its charge.
“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 Tesla 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,” JPMorgan analyst Ryan Brinkman wrote in a note out on Monday.
“We advise investors cautiously approach this expectation within the context of both execution risk and the time value of money,” he said.
Added Brinkman: “Investors should in our view be mindful when assessing the implied inflection higher in Tesla performance starting sometime beyond this decade (when results are presumably expected to begin tracking materially stronger than earlier expected, in contrast to materially weaker than earlier expected).”
Brinkman reiterated a Sell rating on Tesla. His $145 price target estimates Tesla’s stock plunging about 60% from current levels.
Tesla shares are already down 20% this year, making it the worst-performing member of the “Magnificent Seven” complex.
Brinkman’s price target is somewhat of an outlier on Wall Street — the average analyst price target for the stock is $360, according to Yahoo Finance data.
The stock warning comes as concerns about Tesla’s financial performance continue to swirl.
Tesla delivered 358,023 vehicles in the first quarter, missing analyst estimates of roughly 366,000 to 370,000 units. Although this represents a 6.3% increase year over year, the growth came from a depressed baseline, and the absolute numbers showed a significant sequential decline from the record-breaking fourth quarter of last year.
The headwinds Tesla is facing remain numerous.
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The expiration of the $7,500 federal electric vehicle tax credit in the US at the end of last year at the hands of the Trump administration dealt a major blow to domestic demand for electric vehicles. Additionally, persistent high interest rates have made vehicle financing more expensive for the average buyer.
Read more: Tesla car insurance: How to shop and save
Meanwhile, Tesla is facing brutal pressure from Chinese EV rivals like BYD (BYDDY), as well as legacy automakers such as Mercedes-Benz (MBG.DE), General Motors (GM), and Ford (F), who continue to forge ahead with EV production, though at a slower pace
To keep passionate Tesla bulls engaged, CEO Elon Musk is promising 2026 will be a big year for new products.
Tesla’s dedicated robotaxi (aka Cybercab), a vehicle designed without a steering wheel or pedals, is slated to begin initial production this month. It will be at the center of Tesla’s new autonomous ridesharing network.
A Tesla electric vehicle is charged at a Tesla Supercharger battery charging station in Barakaldo, Spain, March 29, 2025. REUTERS/Vincent West
(REUTERS / Reuters)
Musk is also accelerating the training of its Optimus humanoid robot, with the goal of deploying it for “repetitive or boring tasks” within its own factories by the end of the year.
Brinkman added, “Although both technology and execution risk seem substantially less than was once feared, expansion into higher volume segments with lower price points seems fraught with greater risk relative to demand, execution, and competition.”
Brian Sozzi is Yahoo Finance’s Executive Editor and a member of Yahoo Finance’s editorial leadership team. Follow Sozzi on X @BrianSozzi, Instagram, and LinkedIn. Tips on stories? Email brian.sozzi@yahoofinance.com.
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