By Michael Elkins
Shares of Tesla (NASDAQ:TSLA) are down 1.57% in mid-day trading on Friday after Morningstar released a report reiterating a $250 fair value estimate on the company. Analysts view the shares as currently undervalued, with the stock trading in four-star territory.
They wrote, “We think the market is concerned that a near-term global economic slowdown will hurt demand for Tesla's cars. However, given the company's relatively small volume base of 1.2 million deliveries on a trailing 12-months basis, we think there is likely still room to grow considerably over the next couple of years even in an economic slowdown.”
Morningstar estimates that Tesla will deliver nearly 1.4M and 2.1M vehicles in 2022 and 2023, respectively. Given that all four of the company's models target the luxury auto market, they think the automaker’s deliveries are less likely to be significantly affected in an economic slowdown, as luxury goods in general tend to see demand hold up better.