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JPMorgan Adjusts Tesla Profit Estimates Amid Delivery Concerns

Key Takeaways

JPMorgan has revised its profit forecasts for Tesla in light of disappointing delivery figures, with analysts highlighting significant brand challenges facing the electric vehicle manufacturer.

On Friday, Tesla’s (TSLA) stock fell by 6% following JPMorgan’s reassessment. The bank cited that the number of vehicles delivered in the recent quarter was substantially below their expectations, signaling what they described as “unprecedented brand damage.” They further noted that their previous assessments may have downplayed the negative consumer response evident in Tesla’s first-quarter delivery and production figures.

Sales Trends Indicate Greater Challenges

JPMorgan analysts pointed out that the involvement of CEO Elon Musk in political controversies, particularly his ties to the Trump administration, has exacerbated issues related to the Tesla brand. While there are indications that Musk may soon step back from public roles, the analysts concluded that the downward trend in Tesla sales is more severe than both they and the broader market had anticipated.

As a result of these developments, JPMorgan adjusted its earnings per share (EPS) forecast for the first quarter of fiscal 2025 to $0.36, down from an earlier estimate of $0.40. The estimates for the full fiscal year were also decreased, from $2.35 to $2.30.

The bank maintained its “underweight” rating on Tesla shares, indicating ongoing concerns about significant potential declines, with a price target set at $120 for December 2025.

Tesla’s stock has now depreciated nearly 40% since the start of the year.

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