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Sell Tesla as earnings report is 'not as good as it looks,' JPMorgan says

Workers assemble cars on the line at Tesla's factory in Fremont, California.
David Butow | Corbis | Getty Images

JPMorgan reiterated its underweight rating on Tesla shares as the company's September quarter results, boosted by one-off benefits, didn't lower its high execution risk in the coming year.

The electric car maker reported better-than-expected third-quarter financial results Wednesday.

"A good quarter — but not as good as it looks; We remain cautious [on Tesla]," analyst Ryan Brinkman wrote in a note to clients Thursday.

"Tesla reported 3Q16 earnings yesterday that at first glance appear to represent a very strong beat to consensus and JPM estimates across all metrics. However, we see one reason why the 3Q16 earnings report is not as good as it looks, and another reason why it might not be as good as it looks."