JPMorgan Warns Tesla (TSLA) Stock Could Plunge 60% — Analyst Breakdown

JPMorgan analyst Ryan Brinkman has issued a stark warning about Tesla's stock, maintaining a Sell rating with a $145 price target. This target implies a potential 60% decline from the stock's current price near $354. The revised outlook comes after Tesla's first quarter 2026 deliveries fell short of expectations, coupled with a record inventory buildup.

In the first quarter of 2026, Tesla delivered 358,023 vehicles, a 6.3% increase compared to the same period last year. However, this number was below analyst projections, which ranged from 366,000 to 370,000 units. Moreover, the delivery figure declined 14% from the fourth quarter of 2025. Brinkman's team noted that these results landed 4% beneath Bloomberg's consensus estimate and 7% under their internal projections.

The analyst's concerns extend beyond the delivery numbers. Tesla manufactured 50,363 more vehicles than it sold during the quarter, leading to an unprecedented inventory buildup. The company's estimated total inventory reached 164,000 vehicles, marking the largest single-quarter increase on record. This surge in inventory reflects a significant gap between production and sales, locking up capital in unsold vehicles.

Brinkman's revised earnings estimates further underscore the pessimistic outlook. He has cut the projected earnings per share (EPS) for the first quarter to $0.30, down from the previous $0.43, and reduced the full-year EPS estimate to $1.80, from $2.00. These revisions reflect the challenges Tesla is facing in balancing production and demand.

Tesla's underperformance is starkly evident in its stock performance. With a 20% year-to-date decline, the stock now ranks as the poorest performer among the Magnificent Seven, a group of high-profile technology stocks that includes Apple, Amazon, Microsoft, Alphabet, Meta, and NVIDIA.

The warning from JPMorgan comes at a time when Tesla is grappling with several challenges. The automaker's inventory buildup suggests that it is producing vehicles faster than they can be sold, potentially leading to pressure on prices and profitability. Additionally, the decline in first-quarter deliveries may indicate weakening consumer demand or supply chain issues.

Despite Tesla's recent struggles, the company has been a significant force in the automotive industry, particularly in the electric vehicle (EV) sector. However, the stock's performance in recent months has raised questions about its valuation and sustainability. The 60% downside implied by JPMorgan's target suggests that investors may need to brace for a substantial correction in Tesla's stock price.

In conclusion, JPMorgan's revised outlook on Tesla highlights the challenges the company is facing, particularly in managing its production and inventory levels. The analyst's Sell recommendation and reduced earnings estimates reflect a pessimistic view of the stock's near-term prospects. As Tesla navigates these challenges, investors will be closely watching the company's ability to address these issues and maintain its position in the competitive EV market.