JP Morgan Analyst Said Tesla Drop Is Unprecedented — Is It Too Late To Invest?
Written by
John Csiszar
Edited by
Amber Barkley
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Tesla seems to always be in the news, whether it’s about the company’s groundbreaking technology, its delivery numbers or its mercurial CEO, Elon Musk. But over the past six months or so, politics has crept into the discussion regarding Tesla alongside its finances — and some analysts, like those at J.P. Morgan, think that it’s a big problem for the company.
Here are the reasons Tesla has been a rollercoaster over the past six months, why J.P. Morgan analysts think the company has problems and whether or not Tesla shares may still make a good investment.
Tesla’s Stock Performance
Tesla has always been a wild stock, and investors have learned to anticipate big swings in its price. With a beta around 2.50, the stock is more than 2.5 times as volatile as the overall market. What’s that like for investors?
It means you have to be prepared for big swings if you’re a Tesla investor. Just over the past few months, the stock fell from a high of $483.99 on Dec. 17, 2024, to a low of $217.02 on Mar. 11, 2025 — a 55% drop. Since then, the stock has rallied back to $339.34 as of May 24, a gain of 56%.
A combination of factors has contributed to Tesla’s most recent wild ride. As CEO Elon Musk began collaborating with President Donald Trump, the stock soared as investors anticipated beneficial treatment for the company. But as Musk began to spend more time on his role at the Department of Government Efficiency (DOGE), investors worried that Tesla’s CEO wasn’t focusing on his own company.
Coupled with falling deliveries, increased competition and political backlash towards Musk, the stock is still down 16% on a year-to-date basis.
What JP Morgan Thinks About the Stock
Beyond the economics that are causing problems at Tesla currently, J.P. Morgan analysts are more concerned with the political damage that Musk’s close relationship with Trump has caused.
The political divisiveness this relationship has caused, according to J.P. Morgan auto analyst Ryan Brinkman, is driving away far more buyers than it is gaining. This has led Brinkman to cut his estimate for global Tesla deliveries in Q1 to 355,000 vehicles, down from 444,000.
As Brinkman wrote in a research note, “We struggle to think of anything analogous in the history of the automotive industry, in which a brand has lost so much value so quickly.”
Brinkman simultaneously cut his price target down to $120, 65% below current levels.
What’s the General Consensus on Tesla?
It should be noted that Brinkman has consistently been negative on Tesla, even during the times when shares rocket higher. Other analysts hold more bullish views on the company, with 12-month price targets as high as $500.
But opinions within the analyst community vary wildly. Of the 48 analysts covering the stock, 3 have a sell rating — a rarity on Wall Street — 8 have an underperform rating and 14 have a hold rating. Fewer than half have a “buy” or “strong buy” rating on Tesla shares.
The average price target is $299.38, 12% below current levels.
Is It Too Late To Invest?
Tesla has been taking hits on all sides, from slower deliveries to rapidly improving competitors to political backlash. But bullish analysts see Tesla as hugely undervalued, due in large part to the promise of its autonomous driving technology.
Mega bulls like Ark Invest CEO Cathie Wood see Tesla hitting $2,600 in five years, based primarily on that very technology, as reported by Business Insider. That would make shares a complete bargain at current levels.
The bottom line is that if you’re a believer in the success of Tesla’s autonomous technology, you shouldn’t be that concerned about current issues with growing EV competition, slowing sales and even political backlash.
But if you’re more inclined to believe Brinkman’s opinion, Tesla shares are likely to trend down over time — even if they may go on occasional spurts higher.
Editor’s note: Tesla stock data was sourced from Yahoo Finance and is accurate as of May 24, 2025.
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