Tesla (NASDAQ: TSLA) stock could plunge by more than 60% following a fresh bearish outlook from banking giant JPMorgan.
The downbeat forecast comes as Tesla holds above the $300 level after a recent rally driven by the highly anticipated launch of its robotaxi in Austin.
At the close of Monday’s session, TSLA shares were valued at $317.66, down 1.8%. The weakness has extended into Tuesday’s pre-market, with the stock falling another 4.5% to $303.
As part of its updated view, JPMorgan reaffirmed its ‘Underweight’ rating on Tesla and lowered its price target to $115 per share, a 63% decrease from current levels.
The downgrade follows deteriorating demand trends for Tesla vehicles. The bank now expects second-quarter deliveries to fall sharply.
Analyst Ryan Brinkman projects that Tesla will deliver just 360,000 units in Q2, representing a 19% year-over-year decline and significantly missing Bloomberg’s estimate of 392,000 units. The figure also falls short of Tesla’s own compiled consensus of 385,000.
“Based on our checks, the softer demand for Tesla vehicles evident in 1Q results appears to have continued into 2Q,” Brinkman said
Impact of low China registrations on Tesla stock
JPMorgan’s analysis also drew from global vehicle registration data and third-party forecasts, including Motor Intelligence data for the U.S. market. Brinkman noted that weaker-than-expected insurance registrations in China and soft European sales contributed to the revised forecast.
The 360,000-unit outlook also marks a 9% downgrade from JPMorgan’s prior estimate of 395,000 deliveries in April.
The gloomy forecast is a fresh setback for Tesla as it battles to regain market share. In recent months, Tesla sales have slowed amid rising competition from low-cost Chinese EV manufacturers, as well as growing consumer backlash over CEO Elon Musk’s political views, which many see as polarizing.
Meanwhile, the company’s rollout of its Full Self-Driving technology, marked by the launch of its robotaxi, has faced skepticism following a series of high-profile mishaps.
Featured image via Shutterstock
