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JPMorgan raised its price target for Tesla stock — but the bank still sees shares of Elon Musk's electric carmaker falling almost 50% in the coming year.
Tesla stock is down 7% since it reported third-quarter vehicle deliveries on Wednesday, but JPMorgan thinks it can go much lower.
In a Thursday note, the bank set its December 2025 Tesla stock price target to $130, representing potential downside of 48% from Wednesday's close.
That target is a slight increase from the bank's prior target of $115 a share.
According to JPMorgan analyst Ryan Brinkman, Tesla could be on the verge of not growing its full-year unit volumes for the first time ever.
"The continued softer trend now appears to position Tesla to potentially not grow full year unit volumes for the first time in its history, which we estimate could cause incrementally more investors to reconsider the company's growth stock multiple," Brinkman said.
Year-to-date, Tesla has delivered 1.29 million vehicles. To exceed its 2023 vehicle delivery volumes of 1.81 million vehicles, the company would have to deliver more than 520,000 vehicles in the fourth quarter, which is more than what Wall Street analysts expect.
Consensus estimates on Wall Street are tracking at about 500,000 vehicle deliveries in the fourth quarter, Wedbush analyst Dan Ives said.
Meanwhile, the most vehicles Tesla has ever delivered in a quarter is 484,507, which occurred in the fourth quarter of 2023.
Brinkman believes Tesla's potential inability to grow vehicle deliveries this year, which CEO Elon Musk has previously said should grow at an annual rate of 50% for the long term, could cause investors "to pay more attention to the growing gap between fundamentals and valuation."
And even with its $130 price target, Brinkman believes that's a generous valuation for the automaker.
"Despite implying material downside risk, we feel our valuation analysis, nevertheless, generously values Tesla as the world's most valuable automaker, given it is suggestive of a ~$400 market capitalization vs. Toyota $290 bn despite considerably less earnings and cash flow and given the company's stalled automotive growth over the past two years makes it harder to embrace the hyper growth story," Brinkman concluded.
Of course, while Brinkman has been a longtime Tesla bear, the bulls view it as less of a traditional automaker and more of a technology company.
Tesla is set to host an event on October 10 to showcase its robotaxi plans. Meanwhile, Tesla bull Adam Jonas of Morgan Stanley has speculated that Tesla can grow its valuation by selling its own phone and even drones.
"Is it just me, or are you seeing more 'breadcrumbs' from Tesla's CEO that could potentially connect Tesla with aviation?" Jonas asked in a note earlier this week.
This differing view among analysts — over whether Tesla is an automaker or a tech company — explains the widening gulf between price targets among the bears and the bulls.
Jonas has a $310 price target for Tesla stock, more than double Brinkman's $130 target.
