Analyst rips JPMorgan’s Tesla outlook, claims 50% downside not bearish enough

The downturn, as well as its causes, have prompted JPMorgans (NYSE: JPM) Ryan Brinkman to forecast a 50% downside for TSLA shares, and yet, one Wall Street expert estimates the target is not bearish enough.

Gordon Johnson, the founder of GJL Research, issued a call to JPMorgan‘s analyst to back their estimates that a $405.3 billion market capitalization – Tesla’s valuation if the firms equity halves – is fair, in an April 17 X post.

According to Johnson, even after such a plummet, Tesla would still be worth more than the next two most valuable car companies, BYD and Toyota, despite delivering, per the researchers figures, only 13% as many vehicles in the previous 12 months.

GJL Research founder, who became infamous for setting two TSLA stock price targets just above $20 in 2024, concluded his post by calling on JPMorgan analysts to ‘show their work’ and demonstrate why they forecast only a 50% plummet.

Why JPMorgan estimates Tesla stock will plunge to $120

Elsewhere, the same factors that drove JPMorgan to abandon its already bearish $135 TSLA stock price target in favor of $120 and to retain the ‘underweight’ – ‘sell’ – rating on March 12 remain at play at press time on April 18.

Specifically, Teslas latest delivery reports indicate that expecting a sales decline for the second consecutive year is well within reason.

Simultaneously, and as evidenced by both the number of cars shipped in the first quarter (Q1) and the prevalence of vandalism, brand damage that arose from Elon Musks controversial political activities has not been washed away.

Is $400 billion a fair valuation for Tesla？

As for Johnson‘s exceptionally bearish assessment, the logic behind comparing the actual results of Tesla’s electric vehicle (EV) business to those of other major car manufacturers, and using the contrast to cast doubt on the market capitalization, is hardly unreasonable.

Still, it ignores the critical fact that TSLA shares valuation, much like the valuation of other popular equity, has for years been driven more by the combination of hope and powerful narratives.

Tesla has been successfully positioning itself as a critical innovation leader for years, despite its technologies lagging behind the original promises and, in some cases, those of its competitors.

The strategy has been helped along by Musk‘s own reputation as a visionary: a reputation in part cultivated using company agreements that allow the billionaire to present himself as a firm’s founder even though he had nothing to do with the founding.

By 2025, Tesla has, on the one hand, delivered on at least in part on its autonomous driving promise and, on the other, has been pushing an artificial intelligence (AI), robotics, and, most recently, robots on Mars narratives.