Wall Street repeatedly lowers Tesla's target price! JP Morgan: The stock price may drop another 50%!

Two more institutions have joined the camp predicting a decline in Tesla's sales.

On Wednesday Eastern Time, McNally lowered Tesla's full-year vehicle delivery forecast from 1.88 million to 1.75 million and reduced the target price from $270 to $235, citing that the Tesla brand and sales are suffering from global "destruction," the effectiveness of the updated version of the autonomous driving assistance system is limited, and investor confidence in the company's future growth has been undermined.

On the same day, JP Morgan pointed out that Tesla's Q1 deliveries may hit the worst quarterly performance in nearly three years and lowered Tesla's target price to $120, the lowest on Wall Street, indicating more than 50% downside potential compared to the current stock price of about $250 on Wednesday.

Evercore ISI and JP Morgan are not the only institutions to downgrade Tesla's sales. A previous article from Wall Street Insight pointed out that several Wall Street analysis institutions have recently lowered their Tesla sales forecasts.

For example, UBS analyst Joseph Spak lowered Tesla's full-year delivery forecast to 1.7 million on Monday, contributing to Tesla's stock price experiencing its largest single-day drop since September 2020. Baird analyst Ben Kallo also previously lowered Tesla's delivery expectations.

Evercore ISI: Tesla's new model may only be a downgraded version of Model Y

In the report, McNally pointed out that investors are increasingly skeptical about whether Tesla will quickly expand its product line. Although Tesla has stated that it will launch a more affordable new model in the first half of this year, investors are concerned that this new car may only be a cheaper downgraded version of the Model Y, rather than a completely new product line. This doubt has intensified market concerns about Tesla's future sales growth.

Additionally, Tesla's highly anticipated autonomous driving technology has not delivered the expected positive impact. McNally noted that despite the latest version of the FSD autonomous driving software being fully rolled out, data collected by a website shows that the frequency of human intervention by Tesla owners when using FSD has shown almost no improvement.

JP Morgan: Tesla will report the worst quarterly delivery volume in nearly three years

On the same day, JP Morgan analyst Ryan Brinkman also lowered Tesla's target price. FactSet data shows that JP Morgan's current target price for Tesla is $120, the lowest target price on Wall Street, which means more than 50% downside potential compared to Tesla's stock price of nearly $250 on Wednesday.

Furthermore, Brinkman significantly lowered Tesla's first-quarter delivery and earnings expectations. He revised Tesla's first-quarter delivery forecast from 444,000 to 355,000, far below the consensus analyst forecast of 430,000.

According to this forecast, Tesla's delivery volume will hit the lowest level since Q3 2022 and decline by 8% compared to Q1 2024Brinkman explained that Tesla is facing the direct impact of Musk's "more controversial government role" (referring to the "Department of Government Efficiency" that Musk currently leads), and due to Musk's frequent involvement in politics, which has caused dissatisfaction in Europe, the sales pressure on Tesla in Europe is much greater than in the United States.

Brinkman also lowered Tesla's first-quarter earnings per share (EPS) from $0.58 to $0.40 and reduced the EPS forecast for 2025 from $2.80 to $2.35. Brinkman stated:

"It's hard to imagine anything similar in the history of the automotive industry, where a brand's value has depreciated so much in such a short period of time."