MW How to set up financial plans to protect love ones from themselves
By Philip van Doorn
Also: A buy recommendation for Tesla's stock, Nvidia's compelling valuation, and what Apple CEO Tim Cook might do following the big iPhone blunder
Quentin Fottrell - the Moneyist - answers a variety of questions from readers on an almost daily basis. Many of these questions are about conflicts within families over money, while others touch upon investing, retirement planning or other aspects of financial life.
This week, he helped a couple working on an estate plan. They were worried that their son, who has been married for 12 years, would be unable to manage his money responsibly and end up "on the street when he is 70."
Fottrell presented a variety of approaches to setting up a spendthrift trust not only to make sure your heirs don't run out of money, but to address their specific needs and problems, and even to encourage them to work.
More advice from the Moneyist:
-- 'I'm absolutely terrible at managing money': I'm 35 with zero savings and $8,000 debt. How do I turn my life around?
-- 'My daughter harasses me and wants to know where I go': She's after my money. How do I protect myself?
-- 'I'm considering marriage in my mid-60s': Could I be held responsible for my spouse's medical debt?
Tesla stands alone
No, Tesla Inc. $(TSLA)$ isn't this year's worst-performing stock in the S&P 500 SPX. That honor goes to Deckers Outdoor Corp. $(DECK)$, whose stock has declined 43% this year through Thursday - though Tesla has been the second-worst performer with a 41.5% decline. Neither of these companies pays a dividend on its common shares. (Though all investment returns in this article include reinvested dividends.)
This year's decline for Deckers follows an 82% gain in 2024. Investors have been concerned about weakening demand for the company's footwear.
For Tesla, we can add some context by comparing the performance of its stock with others among the largest 20 components of S&P 500 by market capitalization. But a further look back is justified, because the S&P 500 took an 18.1% tumble in 2022 before showing big gains in 2023 and 2024. The table below includes returns from the end of 2021 through Thursday in the right-most column. And that column is an eye-opener for people interested in Tesla's stock. (Returns for the full S&P 500 are at the bottom.)
Company Ticker 2025 return through March 20 2024 return 2023 return 2022 return Return from end of 20221 through March 20, 2025 Apple Inc. AAPL -14.4% 31% 49% -26% 23% Nvidia Corp. NVDA -11.7% 171% 239% -50% 304% Microsoft Corp. MSFT -8.0% 13% 58% -28% 18% Amazon.com Inc. AMZN -11.1% 44% 81% -50% 17% Alphabet Inc. Class A GOOGL -13.9% 36% 58% -39% 13% Meta Platforms Inc. META 0.2% 66% 194% -64% 75% Broadcom Inc. AVGO -17.6% 110% 104% -13% 207% Eli Lilly and Co. LLY 9.3% 33% 61% 34% 215% Tesla Inc. TSLA -41.5% 63% 102% -65% -33% Berkshire Hathaway Inc. Class B BRK.B 16.6% 27% 15% 3% 77% Walmart Inc. WMT -5.0% 74% 13% 0% 86% JPMorgan Chase & Co. JPM 0.2% 44% 31% -13% 65% Visa Inc. V 7.6% 22% 26% -3% 61% Exxon Mobil Corp. XOM 8.7% 11% -6% 87% 113% Mastercard Inc. MA 2.0% 24% 23% -3% 52% UnitedHealth Group Inc. UNH 1.5% -2% 1% 7% 7% Oracle Corp. ORCL -8.1% 60% 31% -5% 84% Netflix Inc. NFLX 6.7% 83% 65% -51% 58% Costco Wholesale Corp. COST -2.2% 40% 49% -19% 65% Procter & Gamble Co. PG 0.6% 17% -1% -5% 11% Source: FactSet
Tesla's stock has lost a third of its value since the end of 2021. It is the only stock on the above list to show a decline for that period.
Read: Tesla's stock is having its worst stretch ever, and the bad news keeps coming
The case for buying Tesla now
Wedbush analyst Dan Ives has been a relentless Tesla cheerleader for years - but in a note to clients on Wednesday, he took the company's chief executive, Elon Musk, to task for the stock's decline this year. Ives recommended Musk make these two moves to stop Tesla's slide, but stuck with his outperform rating and his $550 price target for the stock. That is the highest price target among 58 analysts covering Tesla at brokerage or research firms polled by FactSet.
On Wednesday, Cantor Fitzgerald analyst Andres Sheppard upgraded Tesla to an "overweight" rating with a $425 price target, which would make for an 80% gain from Tesla's closing price of $236.26 on Thursday. Sheppard listed three coming events he expects to lift Tesla's stock.
More coverage of Tesla and Musk:
-- Elon Musk urges Tesla employees to hang on to their stock as he lays out 'sustainable abundance' vision
-- Tesla's stock gets its lowest price target from a bull. It still implies 39% upside.
-- These funds offer exposure to SpaceX after successful return of NASA astronauts
Nvidia's compelling valuation
Nvidia Corp.'s stock $(NVDA)$ has declined 12% this year, but it has risen fourfold since the end of 2021. So how can a case be made that this stock is trading at a compelling valuation? Let's take a look at forward price-to-earnings valuations for the largest 10 companies in the S&P 500 and the full index, along with projected two-year compound annual growth rates (CAGR) for revenue and earnings among analysts polled by FactSet.
The forward P/E ratios are share prices divided by rolling consensus 12-month earnings-per-share estimates. The revenue and EPS growth projections are based on consensus estimates for full years from calendar 2024 through 2026, with adjustments made by FactSet for companies (such as Nvidia and Apple) whose fiscal years don't match the calendar.
Company Ticker Forward P/E Forward P/E at end of 2024 Two-year estimated sales CAGR through 2026 Two-year estimated EPS CAGR through 2026 Apple Inc. AAPL 27.7 33.0 6.5% 15.4% Nvidia Corp. NVDA 24.7 31.3 41.2% 41.9% Microsoft Corp. MSFT 26.6 29.9 13.7% 14.7% Amazon.com Inc. AMZN 29.4 35.2 10.0% 17.6% Alphabet Inc. Class A GOOGL 17.6 21.1 11.2% 12.8% Meta Platforms Inc. META 22.7 23.0 14.1% 9.8% Broadcom Inc. AVGO 26.9 35.3 17.1% 112.0% Eli Lilly and Co. LLY 34.5 34.2 25.8% 58.8% Tesla Inc. TSLA 79.9 120.9 17.2% 36.0% Berkshire Hathaway Inc. Class B BRK.B 25.3 22.5 2.3% -27.9%
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March 21, 2025 14:40 ET (18:40 GMT)
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