Feuding CEOs aside, JPMorgan’s analysts are highly bearish on Tesla. They see the stock falling 77% over the next year.

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Tesla boss Elon Musk has overseen a huge rise in the company’s stock price. Frederic J. Brown/Getty Images
  • Disagreements between Tesla and JPMorgan have sprung out into the open over the last two weeks.
  • But feuding CEOs aside, JPMorgan’s analysts have long been some of the most pessimistic voices on Tesla stock.
  • The Wall Street titan’s research unit thinks Tesla shares should be 77% lower in 12 months’ time and gives an “underweight” rating.

Disagreements between JPMorgan and Tesla have sprung out into the open over the last two weeks, with the bank suing the carmaker and the two companies’ CEOs reportedly feuding behind the scenes.

Feuding bosses aside, JPMorgan’s analysts have long been some of the most bearish on Wall Street about Tesla stock.

The last analyst rating from JPMorgan’s research unit on October 21 gave Tesla a $US250 ($AU347) stock-price target for December 2022. That would be a dramatic fall from Tuesday’s closing price of $US1,109.03 ($AU1,541).

It also gave it an “underweight” rating, which means investors should trim their holdings as the stock is expected to underperform the benchmark.

JPMorgan’s current $US250 ($AU347) price target is the most pessimistic of all the big banks, according to Bloomberg data. The average 12-month price target among Wall Street analysts is $US799.25 ($AU1,111).

Of course, JPMorgan’s research section is independent from other goings-on at the bank. And its analysts could well up their price target when they next publish on Tesla.

Tesla’s stock price has skyrocketed during the pandemic, rising more than 630% from around $US150 ($AU208) before coronavirus knocked the world economy in February 2020 to Tuesday’s closing price.

Over that period, Jefferies has increased its 12-month target price for Tesla from $US120 ($AU167) to $US1,400 ($AU1,946). Morgan Stanley has a $US1,200 ($AU1,668) target price while Goldman Sachs’ is $US1,125 ($AU1,564).

JPMorgan certainly doesn’t think Tesla is a bad company. Analyst Ryan Brinkman wrote in the October 21 note that the carmaker has “leading-edge technology” and a range of products that are “bold, distinctive, elegant, and highly entertaining to drive.” Brinkman could well raise the price target when he publishes his latest research.

Yet Brinkman said Tesla’s valuation is pricing in a lot and implies an expansion “well beyond” what JPMorgan is expecting.

Plenty of other market participants are skeptical about Tesla’s meteoric rise. Michael Burry of “The Big Short” fame has repeatedly said Tesla’s share price is “ridiculous’ and a sign of a bubble.

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