Tesla (TSLA), the only 'negative' stock among M7...JPMorgan "Neutral investment, target price lowered"

▲ Tesla (TSLA)

U.S. electric vehicle manufacturer Tesla (TSLA) is facing sluggishness in key markets ahead of its Q3 vehicle delivery announcement. Investment bank JPMorgan has lowered its Q3 delivery forecast and target price for Tesla, citing weakening demand in the U.S. and Chinese markets, increasing stock price uncertainty.

According to Stocktwits, a financial social platform, on September 28 (local time), JPMorgan maintained its 'Neutral' rating on Tesla while lowering its target price from the previous $445 to $415. This analysis is based on July and August sales data, indicating mixed sales trends in major markets. JPMorgan presented its Q3 vehicle delivery estimate for Tesla at 482,000 units, a decrease of approximately 6.5% from the previous 516,000 units. The main reason for the downward revision was attributed to deliveries in the U.S. and Chinese markets falling short of expectations.

Expectations for profitability indicators have also been lowered. JPMorgan reduced its gross profit margin estimate, citing rising raw material costs, promotional incentives offered during Q3, and the impact of high borrowing rates. While analysts' focus is shifting to artificial intelligence (AI), autonomous driving, energy storage systems, and robotics businesses amid slowing EV sales, margin pressure in the core vehicle segment is acting as a short-term burden on performance.

Wall Street's Q3 delivery forecasts are widely divergent. Earlier, Goldman Sachs pointed to sluggish sales in the U.S., China, and European markets, significantly lowering its Q3 delivery estimate by 11% from 490,000 units to 435,000 units. This was based on the judgment that the strong performance in export markets through the Shanghai factory, including Southeast Asia, South America, and Australia, would not be able to fully offset the demand slowdown in the three major markets. Goldman Sachs' forecast even falls below the market consensus of 456,000 units.

Investor sentiment has also noticeably cooled. The individual investor sentiment index related to Tesla on the Stocktwits platform remained at a neutral level. Tesla's stock price has fallen by 15% this year, making it the only stock among the so-called Magnificent Seven to record a negative return.

Weakening demand in the two major markets and successive downward revisions from Wall Street are increasing the pressure on Tesla ahead of its Q3 delivery announcement. Investors are keenly watching whether Tesla can overcome raw material costs and price discount pressures to demonstrate performance that exceeds the market's lowered expectations.

[Article Key Summary]

-JPMorgan lowered Tesla's Q3 delivery estimate by 6.5% to 482,000 units due to sluggish U.S. and Chinese markets.

-Due to raw material costs and promotional effects, margin estimates and the target price were lowered from $445 to $415.

-Tesla's stock price fell 15% this year, showing weakness as the only one among the Magnificent Seven stocks.

*Disclaimer: This article is for investment reference only, and we are not responsible for any investment losses based on it. The content should be interpreted for informational purposes only.*