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 bank posted unaudited cash earnings for the quarter of A$1.7 billion, down 2% on the average of its prior two quarters
National Australia Bank said that higher credit impairments against business loans contributed to a small fall in its unaudited December quarter cash earnings.
NAB , which is Australia’s second-largest bank by market capitalization, on Wednesday posted unaudited cash earnings for its fiscal first quarter of 1.74 billion Australian dollars, equivalent to about US$1.11 billion.
That was down 2% on the average of its prior two fiscal quarters. NAB did not give a year-earlier comparison.
The lender said that revenue grew by 3% compared with the average of its prior two fiscal quarters. Underlying profit growth of 4% over the same period was offset by higher credit impairment charges and income tax expenses, it added.
NAB, which posted an unaudited quarterly statutory profit of A$1.70 billion, said the A$267 million credit impairment charge included A$152 million of individually assessed charges. Those were mainly against Australian businesses and unsecured retail portfolios, it said.
The individual charges were up by 54% compared with a year earlier. NAB said that it had not altered its economic assumptions and scenario weightings.
“The economic outlook is improving but cost of living and interest rate challenges persisted,” Chief Executive Andrew Irvine said. “While most customers are proving resilient, we have maintained prudent balance sheet settings.”
NAB said it had seen a small decline in net interest margin due to funding costs, lending competition and deposits, partially offset by the benefit of higher interest rates.
On Tuesday, the Reserve Bank of Australia cut the country’s cash rate for the first time since 2020 but warned against expecting subsequent near-term cuts.
NAB is still targeting full fiscal-year productivity savings of more than A$400 million, and for operating expenses to grow by less than 4.5%, Irvine said.
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