Tesla Stock Is Rising. Analyst Sees ‘Limited’ Focus on Fundamentals.
2 min
Tesla stock fell while the market rallied on Friday, which makes Monday’s gain a relief for investors watching the stock after its recent surge. Still, no one should mistake Tesla ’s recent moves for anything based on the fundamental factors driving the business.
Let’s back up. Tesla’s stock has been on a tear of late, which makes Friday’s move something of a puzzle. Shares of the electric-vehicle maker dropped 3.5% on Friday, closing at $421.06, while the S&P 500 rose 1.1%.
There wasn’t a great reason for the divergence. “To me, [Tesla stock] was wildly overbought and long hedge funds needed a reason to take some profits,” says Future Fund Active exchange-traded fund co-founder and Tesla shareholder Gary Black .
“Overbought” is a trading term that essentially means the stock has gone up a lot quickly. When that happens, it can be a sign a lot of good news is reflected in the price and that there aren’t many buyers left to fuel more gains.
Some profit-taking in Tesla shares is natural—especially considering the rally. Coming into Monday, Tesla stock had risen 69% this year and 67% since the Nov. 5 election . Shares have declined 12% from a record closing high of $479.86 on Dec. 17.
Tesla stock closed up 2.3% at $430.60, while the S&P 500 and Dow Jones Industrial Average were up 0.7% and 0.2%, respectively.
One thing helping shares was a report from Barclays analyst Dan Levy . He expects the company to deliver 515,000 vehicles this quarter. Wall Street expects Tesla to deliver roughly 510,00 vehicles, according to various consensus aggregators, a record for any quarter.
Better-than-expected results can help any stock, but Levy’s number is important for another reason. Tesla needs to deliver about 515,000 vehicles to increase deliveries in 2024 compared with 2023. While Tesla delivered 1,808,581 vehicles in 2023, it shipped 1,293,656 in the first three quarters of 2023, down about 7% year over year.
Levy isn’t a Tesla bull. He rates shares Hold and has a $270 price target on the stock. A “beat could keep narrative momentum strong,” wrote Levy. “But [a] focus on fundamentals [is] limited overall.”
Tesla stock has added about $170 a share since the election, boosting Tesla’s market value by more than $550 billion, even though the car business hasn’t changed all that much.
Investors, however, are thinking about earnings. They believe Tesla’s self-driving robo-taxi business will drive significant value. That business is slated to begin in late 2025.
Levy is less optimistic, though. He even used the word “meme” in his report, referring to stocks that go wild for little reason.
Overall, about 46% of analysts covering Tesla stock rate shares Buy. The average Buy-rating ratio for stocks in the S&P 500 is about 55%. The average analyst price target for Tesla stock is about $296 a share, up about $60 sine the election.
No matter what happens in the last few days of the trading year, 2024 will have turned out quite well for Tesla investors. It is their reward for enduring volatility. Don’t forget, Tesla stock bottomed out below $$140 a share in April.
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The recent budget has forced a reckoning for property investors.
Negative gearing now restricted to new residential builds, the CGT discount gone and on paper, the numbers look different.
And many investors are responding by pivoting toward yield, prioritising cash flow over capital growth in a way that property strategists say misses the point entirely.
“The debate has shifted to yield versus growth as if they are opposing forces,” says Abdullah Nouh, founder of Melbourne-based buyers’ agency Mecca Property Group. “But that framing is itself the mistake.”
Nouh, who works with high-net-worth families and investors on long-term acquisition strategy, argues that capital growth remains the primary driver of genuine wealth creation and that the post-budget environment has made quality assets more important, not less.
The numbers make his case plainly. An additional $500 per week in rental income is welcome. A prestige asset appreciating by $1 million over a market cycle is transformative.
These are not equivalent outcomes, and portfolios built around yield at the expense of location and land value tend to generate income while wealth stands largely still.
The more nuanced shift Nouh is seeing among sophisticated investors is a move toward assets where both outcomes can be engineered simultaneously – established homes on substantial land in quality locations, where the existing dwelling can be repositioned, rental returns improved, and the underlying land value compounds independent of what sits on it.
For investors with existing equity, commercial property is also entering the conversation in a more serious way.
Prestige industrial assets, medical centres and long-leased essential retail offer income profiles that residential property in most capital city markets cannot currently match: longer lease terms, tenants covering outgoings, and greater predictability than the residential tenancy cycle.
“The investors who build lasting wealth are rarely the ones who chased yield or growth exclusively,” says Nouh.
“They are the ones who built a strategy they could sustain – one that generated enough income to hold quality assets through multiple cycles while those assets compounded in value.”
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