JPMorgan Remains Bearish on Tesla Stock (TSLA), Says ‘Record Surge in Unsold Vehicles Adds to FCF Woes’

FomoAnxiety · 2026-04-06T18:55:20+00:00

Tesla's Q1 2026 deliveries fell short of expectations, prompting JPMorgan's Ryan Brinkman to maintain a Sell rating with a reduced price target of $145. Despite a 6.3% year-over-year growth, deliveries dropped 14% from the previous quarter, leading to increased unsold inventory and pressures on cash flow.

FomoAnxiety

2026-04-06 18:55:20

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Tesla TSLA -2.38% ▼ recently reported lower-than-expected deliveries for the first quarter of 2026, disappointing investors and several analysts. In reaction to the dismal Q1 update, JPMorgan analyst Ryan Brinkman reiterated a Sell rating on Tesla stock with a price target of $145, noting the “record surge in unsold vehicles adds to free cash flow woes.”

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Tesla reported Q1 2026 deliveries of 358,023 units, which reflected a 6.3% year-over-year growth but missed the Street’s expectations and declined 14% from the previous quarter.

JPMorgan Analyst Is Disappointed with Tesla’s Performance

Brinkman lowered his estimates, saying that Tesla’s Q1 deliveries were 4% lower than the most recent Bloomberg consensus estimate and 7% less than JPMorgan’s expectations. He noted that the 15% year-over-year decline in energy storage installations to 8.8 GWh was surprising and marked the first such decline since Q2 2022.

Additionally, Brinkman highlighted that Tesla produced 50,363 more vehicles than it delivered in the first quarter, signifying a larger inventory build than in any prior quarter. This led to a record 164,000 vehicles in inventory, according to JPMorgan’s estimate. The analyst lowered his Q1 2026 EPS (earnings per share) estimate to $0.30 from $0.43, while reducing his full-year EPS forecast to $1.80 from $2.00.

The analyst added that the inventory build, coupled with higher capital expenditure in 2026, will significantly pressure free cash flow (FCF). Overall, Brinkman remains bearish on Tesla stock and urged investors to approach it with a high degree of caution.

Is Tesla Stock a Buy, Sell, or Hold Now?

Amid the ongoing challenges, Wall Street is divided on Tesla stock, with 13 Buys, 11 Holds, and eight Sells. While Tesla bulls are optimistic about the company’s robotaxis, Optimus humanoid robots, and other AI ambitions, critics are worried about the persistent weakness in the EV business. The average TSLA stock price target of $393.97 indicates 12% upside potential.

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