Tesla's stock could fall another 60%, JPMorgan analyst warns. Here's what's behind his 'high degree of caution.'

By William Gavin

JPMorgan warns that financial expectations for Tesla have deteriorated in recent years, even as the stock has climbed

CEO Elon Musk has said 2026 would be a significant year as Tesla doubles down on robotaxis.

Investors should approach Tesla's stock with a "high degree of caution," according to a bearish analyst who sees 60% downside from here.

In the wake of a delivery-forecast miss from Tesla (TSLA), JPMorgan's Ryan Brinkman highlighted that the company was also up against a much lower bar than had been expected years ago. Delivery expectations for the first quarter peaked in mid-2022, he noted. And while Tesla's stock has climbed more than 50% since then, there's also been a "material collapse" in financial expectations over that span.

Brinkman pointed to earnings per share, a key metric that shows how profitable a company is. He now expects Tesla to report 30 cents on that metric for the first quarter, but he said consensus expectations for this period "once stood as high as $3.68."

That was just one example of how estimates have come way down for Tesla over a multiyear span, a trend that "does not instill confidence in the company's ability to achieve lofty out-year objectives," according to Brinkman. EPS expectations for 2030 are already about 38% lower than they were back in 2022, he noted.

"If the aforementioned significant degree of performance shortfall vs. earlier expectation - and degradation in consensus expectations for future performance - has been instructive on any count, it should be that even if the fantastic future bullish investors envision is fully realized...it may come on a materially altered timescale," Brinkman wrote.

Read: Tesla's stock falls as delivery report suggests the company is 'actively sacrificing' EVs

Tesla's stock currently trades at about $359 and is down 20% in 2026. The stock peaked just shy of $499 last December as Tesla began further testing of robotaxis.

In an effort to keep investors interested, CEO Elon Musk has said that 2026 will be major for Tesla. A designated robotaxi vehicle is set to enter production this month, while a humanoid robot is scheduled to begin being made later this year. Tesla has also promised to expand its ride-hailing service from two U.S. cities to nine by June.

Those plans need time to scale and won't be cheap. Brinkman noted that Tesla's recent poor sales performance is adding to its "free-cash-flow woes" as the company plans for its most expensive year yet.

The company produced more than 50,000 more vehicles than it sold last quarter, which resulted in what JPMorgan calls a record estimated inventory. Tesla sold 358,023 EVs, below Wall Street's expectations but an improvement against a very weak quarter a year earlier.

It also deployed 39% fewer energy-storage products than expected, showing an unexpected downturn after two quarters of growth. Baird's Ben Kallo said last week in a note that that miss will likely weigh on the stock in the short term as he lowered his price target to $538 from $548.

"This business can be lumpy and swing depending on customer grid hook-up timing, but that does not fully explain this drop-off," William Blair's Jed Dorsheimer told clients in a recent note. The analyst added that he was "confused" because the demand for energy products like Tesla's Megapacks appears to still be strong.

Read: 'Do you believe in Elon?': Musk tests Tesla investors' faith with an expensive chip-making plan

But while JPMorgan's Brinkman cautioned investors against buying the recent dip, Cantor Fitzgerald's Andres Sheppard on Monday said that recent weakness in Tesla's stock price serves as a "good entry point" for investors.

"We view FY26 as a transformational year for the company as it transitions into autonomy, AI and robotics," Sheppard wrote in a note to clients. He rates Tesla overweight with a $510 price target.

-William Gavin

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04-06-26 1216ET