Tesla (TSLA) stock fell 4% on Friday to end the week after the EV maker missed Wall Street expectations in third-quarter deliveries, announced a recall and discontinued sales of lower-priced models. I was on the verge of finishing it.
Elon Musk’s electric car maker delivered 462,890 EVs in the three months ending September 30th. That was slightly below Wall Street’s expectations of 463,897 units, but disappointed investors sent Tesla shares down more than 3% after Wednesday’s report. This slight miss marks the fourth consecutive quarter that Tesla has missed analyst estimates.
The turmoil continued on Thursday, with shares falling another 3% after Tesla quietly discontinued its cheapest electric model. Wedbush’s Dan Ives said the discontinuation of Model 3 sedan production was aimed at removing Tesla’s last dependence on Chinese auto parts in light of rising trade tensions. Ives said the Model 3 Standard Range rear-wheel-drive vehicle is Tesla’s last vehicle to use lithium iron phosphate (LFP) battery cells sourced from China. Just two years ago, about half of Tesla’s EVs used cheap LFP batteries.
Separately on Wednesday, Tesla recently announced its fifth recall of the year for the Tesla Cybertruck. Tesla has recalled more than 27,000 of its silver spaceship-like electric pickups because they had problems with rearview cameras and didn’t meet federal safety standards.
Tesla has faced a number of high-profile issues over the past year, from safety concerns over its Autopilot feature and mass recalls to factory closures, layoffs and increased competition in China. It’s been a week. Three senior Tesla executives resigned this spring, and Blumerg reported Thursday that longtime chief information officer Nagesh Sardi is also leaving the company.
Shares rose 4% in Friday afternoon trading as strong September employment data boosted the market.
Tesla shares have been on a roller coaster, plunging after a disastrous first-quarter earnings report in April, but rebounding in July when the company’s upcoming earnings beat expectations thanks to price cuts.
Narayan said all eyes are now on Tesla’s upcoming robotaxi event, which will either solidify Elon Musk’s reputation as an AI leader or call into question his lofty goals. It will either be thrown or thrown.
“Robotaxi Day marks a seminal and historic day for Mr. Musk and Tesla,” Wedbush’s Dan Ives said in a bullish note to investors on Friday. We believe this is a new chapter of growth centered around the future of AI.”
“We continue to believe Tesla is the most undervalued AI name on the market and expect Musk & Co. to announce some ‘game-changing’ autonomous technology at this event next week. ” he added. Ives has the 44% recommendation of Wall Street analysts to buy the stock. He sees the stock rising to $300 over the next 12 months, well above the consensus estimate of about $217, according to Bloomberg data.
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RBC analyst Tom Narayan told Yahoo Finance that while he has high hopes for the future of self-driving robotaxis, Tesla stock is unlikely to skyrocket on this event.
“I think it’s hard to get excited about a stock at such a high level,” he said, noting that the announcement represents Tesla’s big-picture vision for AI and self-driving cars, and that it’s possible that that vision will come true. That will likely take several years, he said. It makes economic sense for EV manufacturers.
Narayan believes Tesla’s fast-growing energy storage business and Tesla EV credit sales, which could generate “billions” next year, will be an additional big boon for the company.
Tesla CEO Elon Musk during the Milken Conference 2024 Global Conference session in early 2024 in Beverly Hills, California. Reuters/David Swanson/File Photo (Reuters/Reuters)
JPMorgan (JPM) analysts have a more modest outlook on Tesla, giving it an underperform rating. Tesla’s third-quarter deliveries were not far below Wall Street’s recent expectations, but JPMorgan noted that deliveries were far from what analysts had expected years ago, and later forecast Soothed. According to JPMorgan, analysts expect Tesla to deliver 651,000 EVs in October 2022, about 29% more than the company actually reported during the same period. .
And that self-driving car dream could face hurdles to mainstream acceptance. Efforts by companies to integrate self-driving taxis into urban transportation have so far failed. Waymo, owned by Alphabet Inc. (GOOG), was investigated by the federal government this spring after crashes and traffic violations, and in June the company recalled nearly 700 self-driving cars. Cruise, owned by General Motors, was suspended last year after a driverless taxi hit a pedestrian and dragged him 20 feet.
JPMorgan on Thursday lowered its full-year forecast for Tesla’s earnings per share to $0.60 from $0.64, saying poor third-quarter results could see Tesla face its first-ever year with no growth in deliveries. he added. They argue that the continued disconnect between Tesla’s fundamentals and stock market hype means that the 2024 delivery miss is not “some kind of problem,” but rather that “more investors are starting to understand the difference between fundamentals and valuation.” “This will be another factor that will draw attention to the widening gap between the two countries.” Ah, the moment when stock prices plummet.
Laura Bratton is a reporter for Yahoo Finance.
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