Tesla stock (NASDAQ: TSLA) is trading down more than 1% on Monday, and the slide is looking less like collateral damage from a rough macro day and more like a stock wrestling with its own credibility.
While retail investors have largely stood firm, three institutional voices: JPMorgan, Morgan Stanley, and Phillip Securities have each taken a careful step back from the Tesla story over the past ten weeks.
Their reasons differ in detail but are aligned in conclusion: the valuation reflects a future Tesla hasn’t yet earned.
JPMorgan says ‘sell’
JPMorgan’s case is the bluntest, as the bank trimmed its price target to $145 from $150 and maintained its Underweight rating, a call that implies roughly a 63% downside from where Tesla sits today.
The core concern isn’t Tesla’s technology; it is its capital discipline.
Tesla has guided for roughly $20 billion in capital expenditure in 2026, more than double its prior year spending, while simultaneously projecting zero free cash flow in both 2026 and 2027.
JPMorgan reads that combination as a company betting heavily on robotaxi and Optimus with no near-term financial return visible on either.
The bank trimmed delivery growth forecasts from 10% to just 5% for 2026, and cut EPS estimates for both years, noting Q4 earnings and revenue deteriorated year over year and fell well short of what the much lower share price had previously implied.
Tesla’s Q4 numbers frame the concern clearly. Revenue came in at $24.9 billion, down 3% year over year.
Net income attributable to shareholders fell 46% year over year on a full-year basis, declining from $7.08 billion in FY2024 to $3.8 billion in FY2025.
On a quarterly basis, Q4 2025 GAAP net income came in at $0.8 billion.
Is Tesla stock priced for perfection?
Morgan Stanley’s shift carries particular weight because the bank was one of Tesla’s loudest institutional bulls for years.
In December 2025, new analyst Andrew Percoco, who took over coverage from the well-known Adam Jonas, downgraded the stock from Overweight to Equal Weight with a $425 price target, the first time the firm stepped back from a Buy since 2023.
Percoco used a sum-of-the-parts model, essentially valuing each piece of Tesla’s business separately, and concluded that every credible positive catalyst through 2026 is already reflected in the share price.
His delivery estimate for 2026 sits 13% below Wall Street consensus, driven by a more cautious view on US EV adoption and intensifying competition abroad.
Phillip Securities’ Glenn Thum adds the valuation lens from a different angle.
In a February note, Thum maintained his Sell rating and set a $215 price target, citing the loss of US EV tax credits, rising tariffs, and the collapse in China’s market share as near-term pain points with no immediate offset.
Autonomous and robotics contributions, in his assessment, remain realistically five years away from meaningful revenue.
The broader consensus hasn’t fully turned as MarketBeat’s composite sits at a Hold with an average target around $410, reflecting 17 Buy ratings against 8 Sells.
The bears aren’t the majority, at least not yet, but their arguments are gaining data points with every passing quarter.
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