JPMorgan Adjusts Tesla Stock Price Target Amidst Growth Concerns

JPMorgan Chase & Co. has updated its price target for Tesla Inc., forecasting a potential fall of nearly 50% for the electric car manufacturer’s shares over the next year. The financial institution has projected a December 2025 stock price target of $130, indicating a significant decline from Tesla’s recent closing price. This adjustment marks a minor increase from JPMorgan’s previous price target of $115 a share. Despite the adjustment, Tesla’s stock has already fallen by 7% following its recent earnings report.

Ryan Brinkman, an analyst at JPMorgan, has suggested that Tesla may fail to grow its annual unit volume for the first time, which could lead investors to reassess the company’s growth-based valuation. “The continued softer trend now appears to position Tesla to potentially not grow full year unit volumes for the first time in its history,” Brinkman stated. “This we estimate could cause incrementally more investors to reconsider the company’s growth stock multiple.” Currently, Tesla has delivered 1.29 million vehicles this year and to surpass 2023’s delivery volumes goals, it would have to exceed 520,000 vehicles in the last quarter, a number higher than the expectations of many analysts.

Wedbush‘s Dan Ives remarked that the Wall Street consensus estimates for the fourth quarter stand at approximately 500,000 vehicle deliveries. Tesla has only once delivered close to this figure, with a record 484,507 vehicles delivered in the last quarter of 2023. The tension between Tesla’s projected growth and actual delivery figures adds pressure on the company, which CEO Elon Musk had forecasted to grow at an annual rate of 50% over the long term.

Brinkman argues that the discrepancy between Tesla’s market fundamentals and its valuation is growing. “Despite implying material downside risk, we feel our valuation analysis generously values Tesla as the world’s most valuable automaker, given it is suggestive of a ~$400 market capitalization versus Toyota’s $290 billion, despite considerably less earnings and cash flow,” Brinkman concluded.

Elon Musk recently announced an upcoming event on October 10 to present Tesla’s plans for its robotaxis, which is drawing significant attention. Adam Jonas from Morgan Stanley, a notable Tesla supporter, presents a contrasting view, considering Tesla less as an automotive manufacturer and more as a technology company. Jonas speculates possible synergies, hinting at Tesla’s interest in ventures such as phone sales and drone technology, suggesting, “Is it just me, or are you seeing more ‘breadcrumbs’ from Tesla’s CEO that could potentially connect Tesla with aviation?”

This divergence in opinion, whether Tesla should be valued as an automaker or tech company, underlies the substantial differences in price targets among analysts. Jonas’s optimism is reflected in his price target of $310, significantly higher than Brinkman’s.