Banking giant JPMorgan Chase is issuing a sell rating on Tesla (TSLA), expecting the stock to collapse amid concerns about market expectations and underlying performance.
In a new post on X, Yahoo Finance executive editor Brian Sozzi reports that JPMorgan believes TSLA could fall by 60% from current levels.
According to JPMorgan, expectations for Tesla’s core business have deteriorated across multiple time frames, even as analysts hike their TSLA price targets.
“With expectations for Tesla performance having collapsed for all financial and performance metrics across all time periods through the end of the decade, the +50% rise in TSLA shares and +32% increase in analyst price targets as this collapse has taken place implies an expectation for a sharp pivot to materially better than earlier expected performance in the time beyond this decade — we advise investors to cautiously approach this expectation within the context of both execution risk and the time value of money.
Investors should, in our view, be mindful when assessing the implied inflection higher in Tesla performance starting sometime beyond this decade (when results are presumably expected to begin tracking materially stronger than earlier expected, in contrast to materially weaker than earlier expected).”
Data from TipRanks shows that most analysts have set TSLA price targets between $352 and $600.
As of Friday’s close, TSLA is trading at $360. A 60% correction from current levels would put the stock at around $142.
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