JPMorgan analyst Ryan Brinkman stated that Tesla investors should proceed with caution, as the electric vehicle manufacturer faces risks of further performance deterioration. Brinkman revised down his earnings estimates for Tesla after the company reported first-quarter delivery figures that fell short of expectations last week.
JPMorgan lowered its first-quarter 2026 earnings per share forecast from $0.43 to $0.30, reduced the full-year 2026 estimate from $2.00 to $1.80, and cut the 2027 projection from $2.45 to $2.25.
"We continue to see approximately 60% downside potential for Tesla shares relative to our December 2026 price target of $145 and recommend investors maintain a highly cautious stance on Tesla stock," the analyst wrote.
He further added that investors should "note execution risks and the time value of money, given that Tesla's stock price increase implies significantly stronger forward earnings expectations, while consensus estimates for all performance metrics through at least the end of this decade have been substantially reduced."
JPMorgan indicated that Tesla's current stock price is approximately 50% higher than its peak delivery period in June 2022.
The firm noted that a record increase in unsold vehicles has exacerbated free cash flow challenges.
Brinkman stated, "Both the company's performance and analyst expectations for this decade's results are significantly below previous estimates, suggesting at least a potential continuation of overall weaker performance."
Brinkman maintained an underweight rating on Tesla stock with a $145 price target.
Tesla shares declined 0.66% on Monday, following a 5.4% drop last Thursday.
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