JPMorgan Chase lowers profit forecast for Tesla. The company's first quarter delivery volume falls short of expectations.

Morgan Stanley analyst Ryan Brinkman said that Tesla investors should be cautious because the electric car manufacturer faces the risk of further declining performance. Brinkman lowered his profit forecast for Tesla after the company's first quarter delivery numbers released last week fell short of expectations. Morgan Stanley reduced its earnings per share forecast for the first quarter of 2026 from $0.43 to $0.30, lowered the full year forecast for 2026 from $2.00 to $1.80, and lowered the 2027 forecast from $2.45 to $2.25. "We still believe that Tesla shares have as much as 60% downside potential to our December 2026 target price of $145 and recommend investors to exercise caution with Tesla stock," the analyst wrote. He also added, "Given the significant enhancement of forward profit expectations implied by the rise in Tesla's share price, and at the same time, consensus expectations for all performance indicators have been significantly lowered at least through the end of this decade," investors should "pay attention to execution risk and the time value of money." Morgan Stanley stated that Tesla's current stock price is about 50% higher than when it peaked in June 2022. The company noted that the increase in unsold vehicles has worsened the free cash flow situation. Brinkman said, "Both the company's performance and analysts' expectations for performance in this decade are significantly lower than previous estimates, indicating that the overall performance of the company may continue to weaken." Brinkman maintains an underweight rating on Tesla's stock and a target price of $145. Tesla's stock price fell by 0.66% on Monday and dropped by 5.4% last Thursday.