JPMorgan: Tesla Inc — 1Q26 Deliveries Miss Expectations; Underweight Rating Reiterated
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JPMorgan reiterated its Underweight rating on Tesla (TSLA) with a December 2026 target price of $145, implying approximately 60% downside. First-quarter 2026 deliveries reached 358,000 units, missing the Bloomberg consensus of 372,000 and JPMorgan's own estimate of 385,000. This figure also represents a 74% decline from the peak delivery expectation of 1.366 million units set on June 9, 2022.
Energy storage deployments fell 15% year-over-year to 8.8 GWh, marking the first annual decline since 2Q22 and falling well short of the 14.4 GWh consensus. Consequently, JPMorgan trimmed its 1Q26 EPS forecast from $0.43 to $0.30, while full-year 2026 and 2027 EPS estimates were reduced to $1.80 and $2.25, respectively.
Production exceeded deliveries by a record 50,400 units, pushing accumulated inventory to approximately 164,000 vehicles. Management guided 2026 capital expenditures above $20 billion, doubling the prior Bloomberg consensus of $10.6 billion and exacerbating free cash flow pressures. JPMorgan expects 2026 free cash flow to deteriorate to a $4.9 billion outflow.
Despite persistent operational shortfalls, Tesla shares have climbed roughly 50% since June 2022. JPMorgan argues this divergence reflects embedded market expectations for dramatic post-2030 performance improvements. However, the bank highlights substantial execution risks and notes Tesla's history of missing aggressive targets. With valuation stretched, analysts urge investor caution.