Morningstar confirms $250 target, says stock is undervalued by

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By Michael Elkins

Shares of Tesla (NASDAQ: ) are down 1.57% in midday trading on Friday after Morningstar issued a report that reiterated a $250 estimate of the company’s fair value. Analysts believe the shares are currently undervalued and the stock is trading in four-star territory.

They wrote: “We believe the market is concerned that a short-term global economic slowdown will affect demand for Tesla vehicles. However, given the company’s relatively low volume of 1.2 million deliveries over 12 months, we believe there is still likely is room for significant growth over the next two years, even in the face of an economic downturn.”

Morningstar estimates that Tesla will deliver nearly 1.4 million and 2.1 million vehicles in 2022 and 2023, respectively. Since the company’s four models target the luxury car market, they believe the automaker’s deliveries are less likely to be significantly affected in an economic downturn, as luxury goods generally tend to see demand hold up better.

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