JPMorgan slashes Tesla price target, says sales miss threatens 'rarified valuation'

Published Wed, Apr 3 202411:08 AM EDTUpdated Wed, Apr 3 202412:07 PM EDT

Tesla stock has room to fall further after the electric vehicle maker missed first-quarter delivery estimates, according to JPMorgan. The bank reiterated an underweight rating on Elon Musk's company Wednesday but slashed its price target to $115 per share from $130. JPMorgan's forecast amounts to more than 34% downside from Tuesday's $175.22 close. Tesla has already plummeted more than 32% in 2024. Shares have come under pressure as the EV transition has stalled , and Tesla has responded by lowering some prices. On Tuesday, Tesla missed analyst estimates for vehicle deliveries in the first quarter and notched its first year-over-year delivery decline since 2020. TSLA YTD mountain Tesla stock. The company said the quarter's deliveries were hurt by headwinds tied to militia attacks in the Red Sea that damaged supply chains, a difficult ramp-up of the updated Model 3, and increased competition in China. Unlike a traditional original equipment manufacturer, Tesla reports deliveries rather than sales. "We are slashing our estimates and price target for Tesla shares after updating for 1Q24 deliveries which yesterday tracked materially softer than JPM and consensus expectations," JPMorgan analysts led by Ryan Brinkman wrote. "[W]e estimate [this] could spell trouble for investor confidence in the company's long-term growth outlook that is so critical to sustaining the stock's rarified valuation multiple." Despite Tesla falling roughly 59% from an all-time high of about $410 in November 2021, the bank said Tesla's valuation is still too high. The stock has developed a cult-like following as investors hoped that Tesla would remain the de facto EV and autonomous driving leader. "The stock still strikes us as highly expensive, with extraordinary work and tremendous accomplishment unlike the trend in recent quarters required in coming years to grow into even our $115 price target," Brinkman wrote. Tesla would still boast a market value of some $401 billion even at JPMorgan's $115 per-share price target, the bank said, meaning it would edge out Toyota, with a market cap of $391 billion, "as the world's most valuable automaker." JPMorgan is far from alone in curbing its enthusiasm for Tesla after the latest first-quarter delivery numbers. Guggenheim Securities cut its Tesla price target to $122 from $132 on Wednesday, while Deutsche Bank reduced its target to $189 from $200. — CNBC's Michael Bloom contributed to this report.