What happened

Shares of Tesla (NASDAQ:TSLA) fell today, even as the overall market rose nicely. The stock declined as much as 6.2% but finished the day down 3.9%. Meanwhile, the S&P 500 rose 1.3%.

The growth stock's pullback came as two analysts downgraded their ratings for the stock, citing valuation concerns.

A red Tesla Model 3.

Model 3. Image source: Tesla.https://ts.la/TeslaPressKit

So what

Morgan Stanley analyst Adam Jonas downgraded the stocks rating from "equal weight" to "underweight," indicating he believes shares will underperform the broader market. Along with his rating change, he lowered the stock's 12-month price target from $680 to $650, noting that expectations have become too high with the stock recently trading near $1,000. 

Goldman Sachs analyst Mark Delaney boosted his 12-month price target for the stock from $925 to $950 but lowered the stock's rating from buy to neutral to reflect Tesla shares' sharp appreciation to levels near $1,000 recently. He too believes investors may now be expecting too much from the company.

Now what

It's true that shares have had a nice run recently. The stock is up 47% over the past three months and more than 120% year to date. While the automaker has demonstrated profitability recently, the electric-car maker may have trouble reporting a profit during Q2 because of temporary factory shutdowns. Looking ahead to the rest of the year, investors will expect Tesla to return to rapid growth, particularly as it rolls out its new Model Y crossover and ramps up production at its new factory in China.