JPMorgan: Tesla Inc (TSLA) Will Crater 40% By The End Of 2018

Tesla Inc (NASDAQ:TSLA) is by far the most expensive automaker in history from a valuation standpoint, and JPMorgan sees major downside risk for the stock this year.

CNBC has more details on the very bearish call that came this week:

The firm reaffirmed its underweight rating on Tesla shares, saying other automakers may price their electric cars aggressively.

Tesla has a “highly differentiated business model, appealing product portfolio, and leading-edge technology, which we believe are more than offset by above-average execution risk and valuation that seems to be pricing in a lot,” analyst Ryan Brinkman said in a note to clients Friday. “We have highlighted more concerns regarding increased competition, including from automakers looking to use the sale of battery electric vehicles to subsidize their more lucrative internal combustion engine portfolio vehicles from a legal, regulatory, and compliance perspective, rather than trying to generate profit on the sale of these battery electric vehicles in and of themselves.”

Brinkman has a $180 December 2018 price target on TSLA, which suggests a 44% downside from Thursday’s closing price. He sees downside risk in the automaker’s second quarter earnings numbers, which are due out on August 1, despite the fact that Tesla was finally able to reach its production target goal for the Model 3.

Tesla Inc shares closed at $313.58 on Friday, down $6.65 (-2.08%). Year-to-date, TSLA has gained 0.72%, versus a 5.70% rise in the benchmark S&P 500 index during the same period.

TSLA currently has a StockNews.com POWR Rating of C (Neutral), and is ranked #9 of 24 stocks in the Auto & Vehicle Manufacturers category.