A J.P. Morgan analyst sees 60% downside to Tesla stock—and he may be too optimistic

On Monday, J.P. Morgan analyst Ryan Brinkman issued a report on Tesla the likes of which Wall Street has seldom if ever seen. Brinkman asserting that at its current price of $361, the EV-maker is hugely overvalued. Based on where its fading financials will land by the end of this year, he says it’s worth just $145, and hence eventually headed for a drop of 60%.

For years, this writer has been arguing that Tesla owes its gigantic valuation—today standing at $1.3 trillion—arises almost entirely from the “Elon Musk magic premium,” created when his long-term fans buy into promises of fabulously profitable futuristic products that Musk and Tesla so far have failed to commercialize. Put simply, it looks impossible for Tesla to grow its current, minuscule profits nearly fast enough to justify a market cap starting at $1.3 trillion, since that number would need to grow rapidly from there to hand investors a decent return.

That’s pretty much what Brinkman concludes as well, and to characterize his position as “contrarian” is an understatement. In his new report, Brinkman cites Tesla’s disappointing deliveries—just 358,000 vehicles for Q1—then uses that number to spotlight the giant and growing historical disparity between the market’s vast hyper-bullish expectations and Tesla’s actual underwhelming performance.

In June of 2022, Brinkman points out, when the consensus forecast for its car sales reached its........

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