Electric vehicle (EV) leader Tesla (TSLA 15.31%) just released its first-quarter production and sales data, and investors were shocked -- not in a good way. In response, one of the more negative voices for Tesla stock from Wall Street just got even more bearish.
JPMorgan analyst Ryan Brinkman reiterated his firm's "sell" rating on the stock but lowered his price target from $130 to $115 per share, or 31% lower than where Tesla tades as of this writing. And that's after the stock had already plunged 29% year to date in the lead-up to the first-quarter update.
Are Tesla's growth plans in trouble?
Tesla delivered just 387,000 EVs in the first quarter, which was considerably less than even the lowest estimates. While the analyst's price target for Tesla stock is already well below recent levels, his note warned it "could fall much further still" if Tesla doesn't quickly boost volume and sales growth.
The disappointing first-quarter volume data came even as rival automaker Ford reported a surge in sales of its EVs and hybrid vehicles. While Ford's EV sales volume is still just a fraction of Tesla's, first-quarter EV sales soared 86% year over year. And the company saw hybrid vehicle sales jump 42% as well.
The rub for investors is that while Ford stock trades at a forward price-to-earnings (P/E) ratio below 8, Tesla is valued with a forward P/E of nearly 60. JPMorgan called Tesla's valuation a "hyper growth company valuation multiple." A year over year decline of nearly 9% in Tesla's first-quarter vehicle deliveries means that investors may be reconsidering that valuation. It's too early for Tesla investors to panic, but the company needs to present some plans to reaccelerate growth when it releases its full first-quarter earnings report on April 23.
