Tesla shifts gear, heads for $154b crash in just two days
Tesla’s stock is on course to shed $US76 billion ($154b) in market capitalisation in just two days, fuelled by negative headlines from China and Germany that rekindled concerns about the company’s growth trajectory.
Shipments from Tesla’s Shanghai factory sank to the lowest in over a year in February, weighing on the automaker’s stock, which was down as much as 5.6 per cent overnight Tuesday in the US, after closing 7.2 per cent lower on Monday.
Nio’s weak outlook for deliveries and a production halt at Tesla’s factory in Germany after suspected arson at a nearby high-voltage pylon further hurt the stock. On top of that, at least one analyst covering Tesla lowered his delivery estimates for the first quarter, pointing to data from 11 European countries and the updates from China.
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By continuing you agree to our Terms and Privacy Policy.“We wouldn’t be surprised if estimates start to get revised lower heading into earnings if the global data continues to confirm the slow start we have seen in the first two months of 2024,” said Matthew Portillo, an analyst with Tudor, Pickering, Holt & Co, who lowered his forecast.
Mr Portillo now sees total deliveries for the first three months of the year trending toward 466,700 units. That compares to average analyst expectations of around 474,200 units, according to data compiled by Bloomberg.
While many analysts expect demand to slow this year, the flow of news around electric cars has been grim lately. The company’s own outlook for 2024 was gloomy, followed by similar warnings from traditional car manufacturers as well as newcomers, such as Rivian Automotive and Lucid Group. Apple late last month cancelled its decade-long effort to build an EV.
There could be room for additional declines as investors turn their attention to artificial intelligence firms and Tesla remains the most expense stock among the Magnificent Seven — despite sitting at the bottom of a Bloomberg index in terms of percentage declines for the year. The stock trades at 58 times its forward earnings, with AI-favorite Nvidia Corp. coming in at 34 times.
“Despite the stock’s underperformance year-to-date, we struggle to see a catalyst for Tesla,” Bernstein analyst Toni Sacconaghi wrote in a note on Monday.
The analyst expects “tepid growth” for the company in 2024 and 2025, “bringing into question the company’s growth narrative”.
Bloomberg
