JPMorgan Says Tesla Stock Could Drop 60%, Cuts Price Target to $145

Rising Inventory Prompts JPMorgan to Cut Tesla Price Target to $145

JPMorgan reiterated its sell rating on Tesla, saying the stock could fall about 60% from current levels.

Tesla shares fell 2.15% to close at $352.82 on the Nasdaq on June 6. The decline appeared to follow JPMorgan's decision to cut its price target on the stock to $145 and maintain an underweight rating. That target implies the shares could drop about 60% by year-end. Wall Street's average price target for Tesla is $360. JPMorgan also lowered its 2026 earnings-per-share estimate for the company to $1.80 from $2.00.

Ryan Brinkman, the JPMorgan analyst who wrote the report, said investors should exercise a high degree of caution on Tesla shares. The bank lowered its target in part because of a sharp increase in unsold inventory. Tesla said first-quarter vehicle deliveries totaled 358,023, while production reached 408,386. The report said Tesla produced about 50,000 more vehicles than it delivered, leaving inventory at its highest level for any quarter on record. Brinkman wrote that Tesla's production has risen 80% since the first quarter of 2023, while sales have fallen 15% over the same period. The record increase in unsold inventory is adding to pressure on free cash flow, he wrote.

Brinkman said investor expectations for Tesla remain excessive. Although Tesla's deliveries peaked in early June 2022, the stock has climbed about 50% since then, he said. That disconnect between the share price and operating performance suggests Wall Street is still pricing in a narrative that has yet to materialize. Intensifying competition in the electric-vehicle industry as lower-priced EV models proliferate is another risk.

Oh Hyun-ah, Hankyung.com reporter 5hyun@hankyung.com