If I want to describe a car owned by Peter, I will say "Peter's car".
But how do I describe the car his teacher owns? "Peter teacher's car" or do I have to be descriptive: "the car of Peter's teacher"?
Don't forget your apostrophes to indicate possession.
I would say "Peter's teacher's car" is fine. You could even extend it to "Peter's teacher's car's seat's cushion" if you wanted, but it isn't very elegant.