Joby Aviation Stock Red Pre-Market as Analysts’ Sentiment Shifts

Joby Aviation stock (NYSE: JOBY) is trading down 3.2% in this morning's pre-market, having ended the last week with a 7.9% drop, and a downgrade to boot. The firm, pioneering the electric vertical takeoff and landing (eVTOL) industry, have delivered a strong start to 2025, with the stock up 6.33% after Friday's decline .

JPMorgan's decision to downgrade Joby Aviation came with a revised price target for December 2025, increasing it slightly from $5 to $6. Despite the increase, this price target suggests a substantial downside of 37% from current levels, indicating potential challenges for the eVTOL company.

JPMorgan and its analysts, led by Bill Peterson, have emphasized that stocks within the eVTOL sector may be overvalued when matched against their fundamental performance. This assertion is based on the belief that current stock prices might already be assuming successful type certification, a goal that is still in progress. The note also mentioned the presence of continual retail investments in eVTOL stocks such as Joby and its competitor Archer Aviation, often compared to past market trends that saw similar investment surges followed by corrections.

One key highlight from the downgrade notes was JPMorgan's recognition of Joby Aviation as a leader in the eVTOL industry. The company's progress includes significant activities such as for-credit testing and the establishment of strategic partnerships with major players like Toyota. Nevertheless, despite these achievements, analysts caution that the eVTOL stock valuations remain inflated.

Furthermore, Archer Aviation also faced a negative assessment from JPMorgan, seeing its stock downgraded from Overweight to Neutral, which resulted in a more than 10% decline in its share price.

JPMorgan advises investors to remain cautious and look for more favourable entry points in the market, acknowledging that Joby Aviation might see continued downside pressure in the coming quarters.

The recent downgrade by JPMorgan highlights challenges within the eVTOL market, especially for innovative companies like Joby Aviation. Investors are advised to scrutinise market conditions and consider the inherent risks associated with high valuations in emerging technology sectors.