"We also see an increased likelihood of a stock buyback announcement in the range of $5 billion to $10 billion following TSLA's selloff," Nelson says. The analyst adds that he's bullish on demand for the forthcoming Tesla Semi, a fully electric semi-truck, and forecasts EPS growth of 40% in 2023. "TSLA's share price performance has been hurt by the incessant noise surrounding Twitter since Elon Musk completed his acquisition in late October, but we believe concerns regarding additional stock sales by Musk are overblown," writes Nelson, who rates Tesla stock at Strong Buy. CFRA Research analyst Garrett Nelson, for one, acknowledges the distractions caused by Tesla's mercurial CEO. Such factors don't fit neatly into analysts' spreadsheets, but they are indeed real. Musk's antics and controversial statements as Twitter's owner also have at least indirect effects on both Tesla stock and public perceptions of the brand. On a fundamental level, Musk's sale of some of his Tesla stock in order to help fund his purchase of the social media site added to downward price pressure on TSLA. Tesla CEO Elon Musk's controversial takeover of Twitter also factors into Tesla stock's valuation. That's by no means cheap – but one could argue that it's not an unreasonable premium to pay for a company that's forecast to generate average annual EPS growth of almost 29% over the next three to five years. For example, Tesla stock trades at 31.4 times analysts' 2023 earnings per share (EPS) estimate, per S&P Global Market Intelligence. Their average target price of $279.83 gives Tesla stock an implied upside of about 62% in the next 12 months or so.Īs for Tesla's valuation, some market observers – notably Scott Galloway, clinical professor of marketing at the New York University Stern School of Business – argue that TSLA stock is almost uniquely overpriced.īasic metrics, however, are more forgiving. As Recession Looms, Earnings Forecasts Get Slashed
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