Holon has recently published a report on Tesla, Tesla on the road to a US$10 trillion company and beyond. The report was reviewed by the Chanticleer, The Australian Financial Review on the 13th October, 2021. Below is an extract, the full article can be accessed here.
A Sydney-based fund believes Tesla shares are worth four times their current value. But it’s Holon’s view on the electric vehicle surge that should get investors thinking.
If Elon Musk’s $1 trillion giant Tesla wasn’t already the most polarising stock in the world, then small Sydney fund manager Holon Global Investments might well tip it over the edge.
Following 12 months of research that has culminated in a 144-page report on the electric vehicle giant, Holon’s managing director and portfolio manager Heath Behncke and research director Tim Davies have valued the stock at $US3369 per share, more than four times the current level of $US791.94.
If research by Holon Global Investments is on the money, Elon Musk’s Tesla is well placed to dominate the electric vehicle market for decades.
The valuation is based on Holon’s 30-year discounted cash flow forecast; in a world where it can be difficult to see what’s going to happen in 30 days, such a long-term forecast will be taken with a bucket of salt.
But what struck Chanticleer is the potential surge in electric vehicle sales inherent in the valuation. Holon believes Tesla, with its entrenched first-mover advantage, is well placed to dominate the EV shift, but investors should think more broadly than that.
As Behncke points out, a car is the second-most expensive purchase most families will make. And over the next few decades, families across the world will change the way they make these spending decisions, setting off a wave of disruption that deserves careful consideration.