Demand risks are an especially important concern for Tesla given its rich valuation, which is highly dependent on the company’s future growth potential. Tesla shares are trading at 48 times future earnings, compared to 17 times for the S&P 500 index.
“Tesla shares are based on a growth valuation framework, for which access to low-cost capital is a key factor,” BofA analyst John Murphy wrote in a note to clients, adding that it is possible that the stock is already fairly priced, especially considering market volatility.
However, while the valuation may be held back in the short term by global economic turmoil, ongoing supply chain and logistics issues, and high commodity prices, analysts largely maintain their long-term bullish outlook. for Tesla.
“While Tesla is not insulated from a downturn, we believe its growth and margins could be much more resilient than the rest of the industry in a global downturn,” said Deutsche Bank analyst Emmanuel Rosner, though he lowered the price target. of the shares from $390 to $355.
