JPMorgan Cuts Tesla Profit Estimates on 'Unprecedented Brand Damage'

Telsa (TSLA) shares sank 6% Friday as JPMorgan reduced its earnings estimates for the electric vehicle (EV) maker, citing worse-than-expected deliveries.

The analysts wrote in a note to clients that they made their determination after first-quarter deliveries were "far below even our low end estimate, confirming the unprecedented brand damage we had earlier feared." They added that after seeing Tesla's Q1 deliveries and production report, "we may have underestimated the degree of consumer reaction." 

Sales Trend 'Worse Than We and the Market Had Appreciated'

JPMorgan noted that CEO Elon Musk's role within the Trump administration has "contributed to the controversy surrounding the Tesla brand." The analysts explained that while reports suggested Musk may be stepping down soon, "what does seem clear, however, is that the trend in Tesla sales is worse than we and the market had appreciated."

They now see first-quarter fiscal 2025 earnings per share (EPS) of $0.36, down from their earlier estimate of $0.40, and full-year EPS of $2.30, compared to the previous outlook of $2.35.  

The analysts reiterated their "underweight" rating, saying that they "continue to see large downside" in their $120 December 2025 price target.

Shares of Tesla have lost nearly 40% of their value this year.