Tesla bear warms up slightly to valuation after 2022 sell-off
Spencer Platt

Baird took a hard look at valuation on Tesla (NASDAQ:TSLA) with share down 48% in 2022.
Analyst Toni Sacconaghi noted while Tesla's (TSLA) stock price remains high on almost every valuation metric compared with traditional auto manufacturers due to the unique growth profile, the stock trades at a lower P/FE multiple than Ferrari and valuation looks attractive on a PEG ratio vs. high growth tech stocks.
"Given TSLA's pullback YTD, we see current risk/reward on the stock as more balanced, though still modestly negative, given Tesla's elevated absolute valuation, and the increasing risk of downward revisions amid potential demand challenges. We also worry about the potential for broader market pressure amid higher rates and slower consumer spending, which would likely impact higher valuation stocks such as TSLA disproportionately."
In regard to the Tesla bulls that say the dream case for full self-driving justifies TSLA's valuation, Sacconaghi and team believe that FSD pricing will be largely competed away over time as nearly every automotive technology and feature has been historically.
Baird maintained an Underperform rating on TSLA and kept a price target of $150, which works off a long-term assumption that Tesla hits 10M units and 17% operating margins by 2050.
Shares of Tesla (TSLA) rose 1.10% in premarket action to $184.85.
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