Tesla is down more than 20% from its peak! When will it be time for stock prices to rebound?
Major US EVs $Tesla (TSLA.US)$Stock prices have continued to fluctuate for the past month. Disappointing sales after financial results were announced last month, and in addition to the Black Monday crash last week, it has already fallen 20% or more from 271 dollars during the July peak.
While investors are anxious about when the company's stock will rebound, several Wall Street analysts have updated their target prices.
Tesla's car sales have declined for two consecutive quarters, reflecting sluggish market demand and intensifying competition. Tesla's car sales volume in the first quarter was 0.38 million6810 units, down 8.5% from the same period last year, the first decline since the second quarter of 2020. The decline in the second quarter was reduced to 4.8%, but gross profit margin continued to grow negatively.
Facing a price war in the Chinese market, Tesla was forced to cut prices frequently. Due to factors such as high production costs and a decrease in sales value, the gross profit margin of the automobile sector dropped significantly from 29.1% in Q1 2022 to 18% in Q2 2024, falling to a low level for the first time in 7 years. Furthermore, in the second quarter, Tesla's share in the American EV market shrunk to 49.7%, falling below 50% for the first time.
However, the EV market continues to grow. The share of electric vehicles in the automobile market as a whole is expanding. In addition to the automobile market, Tesla is also beginning to achieve results in sales of energy generation and storage. Currently, the gross profit margin is higher than that of the automobile sector, and there is a possibility that it will be a source of profit growth for the company.
According to Mr. Charles, EV data analyst at Law Motion, the global EV market has achieved 20% growth as a whole, but EV sales are concentrated in a small number of major markets, and there are big differences in growth potential depending on the region.
The European electric vehicle market in the first half of 2024 grew by only 1% compared to the rest of the world, and fell far below the world average of 20% and China's astonishing growth of 30%. According to new car registration data announced by the European Automobile Manufacturers Association (ACEA), the number of new Tesla car registrations in the same region decreased by 12% compared to the same period last year, and as of June, the company's share of the EV market was 10.8%, down from 11.6% at the beginning of the year. It is similar to the situation faced in the US, and it can be seen that Tesla's advantage in the EV market is gradually diminishing.
CEO Elon Musk has come to emphasize the future potential of autonomous driving and AI-related ventures in order to divert investors' eyes from the main business, which is in trouble.
As electric vehicle (EV) sales decelerate, robo-taxis are attracting attention as a possibility for Tesla's future growth. Mr. Musk has been positioning the autonomous driving field as a source of growth for Tesla for some time.
However, August, when the announcement of the “robo-taxi,” which incorporates the company's value as an AI company, was scheduled was postponed until October, and it was decided that a little more time would be spent on important design changes etc. on the front of the vehicle. $Uber Technologies (UBER.US)$ 、 $Lyft Inc (LYFT.US)$ Tesla is facing competitive pressure as rivals such as BYD have made long strides in the autonomous driving taxi field.
Additionally, at the financial results briefing last month, he stated that Tesla is likely to obtain regulatory approval to launch FSD in markets such as Europe and China by the end of this year. Investors have strong expectations that this ability will be effectively monetized.
Is Morgan Stanley $Ford Motor (F.US)$Tesla stock was added to the automobile stock “top pick” list in place of, and the company saw that there was room for an increase of 40% or more, and the target price was set at 310 dollars.
Morgan Stanley analyst Adam Jonas said that the emerging driving force for Tesla's corporate value has become stronger. Jonas particularly emphasized Tesla's potential and monopoly position in the zero-emission vehicle (ZEV) point market and its continuing growth in recurring service revenue. Tesla pointed out that it is actively transferring resources, technology, human resources, and capital from the field of automobile manufacturing to other fields.
Truist Securities left the company's stock unchanged at a neutral rating, and the target stock price was set at 215 dollars. The bank emphasizes that Tesla's artificial intelligence (AI) efforts are important to the company's stock value.
The bank anticipates a slump in car sales, but expectations for energy production/storage and Optimus are also growing. According to Trist analysts, Tesla did not have a “clear stock price detonator” until Robotaxi Day on 10/10, but there is a possibility that the roadster sports car, which is the company's new model, and other more economical models will become key points in the future.
RBC Capital revised Tesla's outlook and maintained a bullish rating while slightly lowering its target stock price as an electric vehicle manufacturer. It reflects the widespread market slump affecting the automotive sector, but Tesla is attracting attention as a potentially attractive investment destination during this period.
Meanwhile, Goldman Sachs lowered Tesla's target price from $248 to $230 and maintained a neutral rating.
The bank's analyst told investors in the research report that the basic gross profit margin of Tesla's automobile business was lower than expected, and sales prices/incentive measures and costs were negative factors in gross profit margin. The bank sees Tesla as a leader in autonomous vehicle driving technology, but it is expected that it will take 2 to 3 years to achieve large-scale autonomous driving capabilities with conditions.
This article uses automatic translation for some of its parts
Sources: Moomoo, Seeking Alpha, Investing
-MooMoo News Vicky
Sources: Moomoo, Seeking Alpha, Investing
-MooMoo News Vicky
Disclaimer: Moomoo Technologies Inc. is providing this content for information and educational use only.
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Toshi03 : At first it was around $138, but I thought it would be expensive even at $138. They pulled M7 in the foot and were told to go somewhere else. I think that's Tesla's assessment. The expectation bubble for EVs has disappeared, but I don't understand the mentality of buying them for $200. Well, they're making excuses that Tesla isn't an EV manufacturer, but no matter how you look at it, it only looks like a rip-off EV manufacturer.