Two prominent banks, JP Morgan and UBS, have presented vastly different forecasts for Tesla’s future, with price targets that are $207 per share apart. This disparity raises questions about the electric vehicle manufacturer’s growth prospects and the impact of its recent Q1 delivery numbers.
UBS Upgrades Tesla to Neutral
UBS has upgraded Tesla from Sell to Neutral, increasing its target price to $352. This move is based on the improved risk-reward profile, despite the stock’s tendency to trade on sentiment and narrative rather than fundamentals. Analyst Joseph Spak notes that near-term challenges, including soft EV demand, higher costs, and slow progress on robotaxi and Optimus, may impact the company’s performance.
JP Morgan Remains Cautious
In contrast, JP Morgan has reiterated its Underweight rating and $145 target price. Analyst Ryan Brinkman points to Q1 deliveries of 358,023, which missed consensus by roughly 4%, and the resulting inventory pileup as a free cash flow problem. Brinkman advises traders to approach the stock with caution.
Prediction Markets Weigh In
Prediction market traders are skeptical about Tesla’s ability to launch robotaxi and Optimus on schedule. On Polymarket, the likelihood of a California robotaxi launch by June 30 is priced at 11%, while the odds of Optimus hitting public sale by the same date are at 6%. Kalshi estimates the probability of Optimus shipping this year at around 17%. These predictions suggest that Tesla may face significant challenges in meeting its ambitious goals.
The Bigger Picture
Looking beyond Tesla, NVIDIA is favored to finish 2026 as the world’s largest company by market cap, with 73% odds on Polymarket. Tesla, on the other hand, has only a 1% chance, while SpaceX, which may IPO this summer, sits at 3%. This broader perspective may indicate that the best opportunity to ride the Musk trade may not be with Tesla, but with other companies associated with the entrepreneur.
The Earnings Setup
Tesla is set to report Q1 results on April 22, with Wall Street expecting $0.34 EPS on $22.85 billion in revenue. However, the company has missed consensus for four consecutive quarters, raising concerns about its ability to meet expectations. The key question is whether Elon Musk has something new to present to investors, which could potentially turn the tide in Tesla’s favor. As the stock trades around $358, down over 22% year-to-date, all eyes will be on the company’s upcoming earnings report.