J.P. Morgan retired its underperform call on Tesla (TSLA), which had projected a 65% stock decline, after a new analyst with a less pessimistic outlook assumed coverage of the electric-vehicle maker.
For long-horizon investors, the coverage shift removes one of Wall Street’s most prominent institutional headwinds against TSLA, a stock trading near $418 with a market capitalisation of roughly $1.57 trillion.1
Key Takeaways
- J.P. Morgan drops bearish Tesla call projecting a 65% stock drop.
- New analyst assumes coverage with a less negative outlook.
- TSLA trades near $418, well above the prior bear-case target.
Coverage Transition & Market Context
The abandoned call had represented one of the starkest price-target gaps on a mega-cap stock on Wall Street, with J.P. Morgan’s implied downside sharply at odds with Tesla’s trajectory over the past year.2
TSLA’s 52-week range spans $273.21 to $498.83, underscoring how far removed the prior bear-case scenario had become from actual trading levels.1 By comparison, Morningstar pegs Tesla’s fair value at $168, citing “very high” valuation uncertainty, while the stock currently trades at a roughly 421% premium to that estimate.
Detailed Analysis
The departure of the previous covering analyst effectively closes a chapter in which J.P. Morgan stood as one of the loudest institutional skeptics of Tesla’s valuation. The incoming analyst is said to hold a less gloomy view of the company and its prospects under chief executive Elon Musk.2
Tesla’s fundamental story has continued to evolve since the bearish call was first established. The company recently began rolling out its Full Self-Driving software in China and received regulatory approval to test FSD in Flanders, Belgium, marking its third European country green-light – developments that analysts say broaden the autonomous-driving addressable market.1
Tesla reported global deliveries of nearly 1.64 million vehicles in 2025, and its energy storage and services businesses have increasingly contributed to revenue diversification.1 The stock currently carries a normalised price-to-earnings ratio of 223, reflecting the market’s expectation of substantial future earnings growth rather than near-term fundamentals.
Analyst Perspective
MarketWatch characterised the move as J.P. Morgan’s new analyst taking over with “a less gloomy view” of the EV company, signalling a meaningful philosophical shift in the bank’s published research stance.2
“Loudest bear in the room quietly leaves,” one market commentator noted on social media following the news, capturing the sentiment of investors who had long viewed the J.P. Morgan call as an outlier.2
Implications for Long-Horizon Investors
For investors focused on Tesla’s multi-year pipeline – spanning autonomous vehicles, humanoid robotics, and energy storage – the removal of a high-profile institutional bear removes a potential sentiment overhang that may have dampened institutional accumulation.1
The shift also arrives as Tesla reports strong growth in European monthly sales and advances FSD approvals across multiple regulatory regimes, factors that could support a re-rating narrative if delivery volumes and software revenue scale as projected.1 Morningstar analysts note that Tesla “has the potential to disrupt multiple industries with its technology for EVs, AVs, batteries, and humanoid robots,” though competition from traditional automakers continues to pressure margins.1
Conclusion
The J.P. Morgan coverage handover marks a notable shift in the institutional analyst landscape surrounding Tesla, retiring a 65% downside projection that had become increasingly disconnected from the stock’s actual performance and business trajectory.2 How aggressively the incoming analyst ultimately prices Tesla’s autonomous and energy ambitions will be closely watched by investors who view TSLA’s long-term story as extending well beyond conventional automaker metrics.
Not investment advice. For informational purposes only.
References
1(June 4, 2026). “Tesla Inc (TSLA) Stock Price Quote, Value & News”. Morningstar. Retrieved June 5, 2026.
2MarketWatch (June 5, 2026). “J.P. Morgan ends bearish Tesla call that was predicting a 65% stock drop”. MarketWatch via Facebook. Retrieved June 5, 2026.
3MarketWatch (June 5, 2026). “Bearish call on Tesla abandoned by J.P. Morgan”. X (formerly Twitter). Retrieved June 5, 2026.
4J.P. Morgan Wealth Management (2026). “Mid-Year Outlook 2026: Promise and Pressure”. J.P. Morgan. Retrieved June 5, 2026.