JPMorgan Turns Rosy on Tesla a Day After Dimon Lauds Musk
(Bloomberg) -- The morning after Jamie Dimon offered Elon Musk an audience to talk up SpaceX, JPMorgan Chase & Co.’s new lead autos analyst completely changed the bank’s tune on Tesla Inc. Most Read from Bloomberg The firm recently cast Rajat Gupta to take on companies previously covered by Ryan Brinkman, long one of Wall Street’s more pessimistic analysts following Tesla. On Friday, Gupta hiked JPMorgan’s price target by 228% and upgraded Tesla’s stock to the equivalent of a hold. JPMorgan had recommended that investors sell Tesla since February 2015, a period coinciding with a 2,850% increase in the stock price. The bank’s about-face happens to be taking place as JPMorgan plays a role in the initial public offering of Musk’s Space Exploration Technologies Corp., which is expected to be the biggest of all time. “The timing will probably raise a few eyebrows,” said Matt Maley, chief market strategist at Miller Tabak & Co. “But both stocks will trade with the ‘Musk premium’ after the IPO. The move actually makes some sense.” Dimon interviewed Musk from a stage on the 51st floor of JPMorgan’s new Park Avenue headquarters Thursday evening to help drum up interest in SpaceX shares. During a 27-minute discussion livestreamed for thousands of the bank’s clients across the US, the JPMorgan CEO called SpaceX’s Starlink satellites “amazing” and deemed Musk’s ambition to make life interplanetary “one of the most exciting ideas in human history.” “Elon is the Edison of our time,” Dimon said. “I always learn listening to you,” he told Musk. The morning after, Gupta touted Tesla’s “unique advantage” of vertical integration that he said is “still somewhat under-appreciated and misunderstood.” In his report published Friday, Gupta set his December 2027 price target at $475. Tesla shares fell 6.6% to $391 amid a broader rout in US equities. The stock has dropped 13% this year, trailing the almost 8% advance in the S&P 500. JPMorgan declined to comment on the timing of Gupta taking over Tesla coverage. A person familiar with the matter told Blomberg earlier this week that Brinkman is still with the bank. Information Barriers Banks are legally mandated to prevent against conflicts of interest between their equity research teams and other aspects of their business, including investment banking. A JPMorgan firm-wide conflict of interest policy states that “the identification and management of conflicts, whether actual, potential or perceived, is critical.” Analysts at Goldman Sachs and Morgan Stanley, who are leading the SpaceX IPO, have neutral ratings on Tesla. Being a Tesla bear can be difficult, given the gulf between the company’s fundamentals and its lofty stock price, which is propped up in part by a large contingent of vocal retail investors. Musk has built a devoted fan base with his promises of futuristic business lines like humanoid robots. Musk has meanwhile been unsparing with analysts, even going so far as to deride “boring, bonehead questions” on earnings calls. Tesla has nine sell ratings, down from 14 this time last year, according to data compiled by Bloomberg. Analysts are becoming increasingly bullish on the stock price even as many continue to question the company’s earnings potential. Over the last 12 months, Tesla’s average price target has risen more than 40%, and the average 2026 profit estimate has sunk 35%. ‘Ravenous’ Spending In one of Brinkman’s last Tesla notes, reacting to the company’s first-quarter earnings, he wrote that the results and conference call commentary raised doubts about the company’s “seemingly ravenous appetite for capital spending.” Brinkman also cautioned the carmaker may face potential legal issues arising from Musk acknowledging that millions of vehicles billed as eventually being capable of operating autonomously lack the sufficient hardware. JPMorgan wasn’t the only firm to ditch its bearish recommendation on the Austin-based EV maker on Friday. Erste Group analyst Stephan Lingnau upgraded Tesla to hold from sell, predicting that the company’s sales and profits will increase this year, supported by new products. “However, the very high valuation of the stock based on the P/E ratio severely limits the further potential for stock price growth,” Lingnau wrote. Tesla trades at 185 times forward earnings, making it one of the most expensive stocks in the S&P 500. The so-called Magnificent Seven has an average PE ratio of about 25. Gupta, for his part, said that while Tesla’s valuation is “clearly lofty” and an inflection in earnings may be a couple years off, the carmaker “deserves the benefit of the doubt.” (Updates to add price target date to the chart and the seventh paragraph.) Most Read from Bloomberg Businessweek ©2026 Bloomberg L.P.
