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Elon Musk’s blowout Tesla delivery haul shows his ‘golden EV success story’ is just beginning to shine, top tech analyst Dan Ives says

Published

1 year ago

July 3, 2023

It’s been a wild ride for Tesla investors over the past few years. After shares of Elon Musk’s EV giant soared to an all-time high of over $407 in late 2021, the company experienced its worst year in history in 2022. With stubborn inflation, rising interest rates, and recession predictions spooking tech investors, Tesla stock dropped 65% last year. But despite a shaky economic backdrop, 2023 has been a year of recovery.

Tesla stock has soared 158% year to date to nearly $280 per share. And top tech analyst Dan Ives of Wedbush Securities believes that there’s more room to run for the EV leader after its latest bullish delivery numbers.

Tesla revealed that it managed record second quarter deliveries of 466,000 over the weekend, ahead of Wall Street’s 447,000 consensus estimate. Production in the quarter also rose to 479,700, which Ives said was evidence of ”improved” capacity and “a healthier macro” in a Sunday research note. The numbers are “proof to combat the narrative of a murky backdrop” and should “put the bears back into hibernation mode,” he added.

The famously bullish Ives maintained his buy-equivalent “outperform” rating and $300 price target for Tesla after the data release. Tesla stock rose as much as 8.4% on Monday in the first day of trading after the release of the firm’s second quarter delivery data.

“This delivery number was a massive step in the right direction and is a major positive for the bulls,” Ives wrote. “Tesla continues to play chess while other EV players are playing checkers.”

While some bears have questioned Tesla’s decision to lean on aggressive price cuts throughout 2023, arguing they could lead to margin issues, Ives said the latest delivery numbers are evidence that the cuts have already “paid major dividends” and are stoking demand.

The analyst believes Wall Street will also eventually begin to value Tesla as a “sum-of-parts story,” referencing the popular sum-of-parts valuation technique used by analysts, which should boost consensus forecasts for the firm.

In a sum-of-parts valuation, analysts value the different divisions or subsidiaries of a given business separately and then combine them to reach an overall valuation and price target for the company’s stock. This type of analysis is often used when valuing large conglomerates that own multiple operations, which all need to be evaluated using different metrics.

Ives believes Tesla is far more than just an EV company, and therefore should be valued using a sum-of-parts analysis. He points to Tesla’s robust supercharger network, energy business, A.I. autonomous driving tech, and “unmatched battery ecosystem” as separate parts of the company that should be valued individually. “With this delivery beat, we believe the sum-of-the-parts story for Tesla is another step towards coming into play,” he wrote, arguing that Tesla’s “golden EV success story” is just beginning to be recognized on Wall Street.

The bear’s take

While Ives and other Tesla bulls took a victory lap Monday, bears weren’t exactly hibernating just yet. Craig Irwin, Roth Capital senior research analyst, held an $85 price target on Tesla and warned of rising competition and a stretched valuation.

“The valuation is just—it’s absurd. It’s egregiously overvalued,” Irwin told CNBC Monday. “And Tesla has over 100 other EV models coming to market to compete against their four mainline units. Many of those are going to be wildly successful.”

To his point, Tesla currently trades at over 70 times its trailing 12-month earnings, while the S&P 500 trades at just under 20 times earnings. A Bank of America research note in June argued that the EV giant is set to lose market share in the U.S. as more legacy carmakers push into the EV business. “Specifically, our forecasts suggest Tesla’s market share will decline from a peak of 78% in 2018 to 18% by 2026,” the investment bank’s automotive analysts wrote.

But while Bank of America admitted that “this market share direction is a bit daunting” for Tesla, they noted that it means the company will remain the largest EV maker in the U.S. for years to come. “TSLA is establishing itself as a sizable player in the total U.S. auto market,” they noted. And the latest delivery numbers for the EV giant certainly aren’t what bears were expecting.

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Business

TC Energy cuts cost estimate for Southeast Gateway pipeline project in Mexico

Published

17 hours ago

November 7, 2024

Anne Joseph

CALGARY – TC Energy Corp. has lowered the estimated cost of its Southeast Gateway pipeline project in Mexico.

It says it now expects the project to cost between US$3.9 billion and US$4.1 billion compared with its original estimate of US$4.5 billion.

The change came as the company reported a third-quarter profit attributable to common shareholders of C$1.46 billion or $1.40 per share compared with a loss of C$197 million or 19 cents per share in the same quarter last year.

Revenue for the quarter ended Sept. 30 totalled C$4.08 billion, up from C$3.94 billion in the third quarter of 2023.

TC Energy says its comparable earnings for its latest quarter amounted to C$1.03 per share compared with C$1.00 per share a year earlier.

The average analyst estimate had been for a profit of 95 cents per share, according to LSEG Data & Analytics.

This report by The Canadian Press was first published Nov. 7, 2024.

Companies in this story: (TSX:TRP)

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Business

BCE reports Q3 loss on asset impairment charge, cuts revenue guidance

Published

17 hours ago

November 7, 2024

Anne Joseph

BCE Inc. reported a loss in its latest quarter as it recorded $2.11 billion in asset impairment charges, mainly related to Bell Media’s TV and radio properties.

The company says its net loss attributable to common shareholders amounted to $1.24 billion or $1.36 per share for the quarter ended Sept. 30 compared with a profit of $640 million or 70 cents per share a year earlier.

On an adjusted basis, BCE says it earned 75 cents per share in its latest quarter compared with an adjusted profit of 81 cents per share in the same quarter last year.

“Bell’s results for the third quarter demonstrate that we are disciplined in our pursuit of profitable growth in an intensely competitive environment,” BCE chief executive Mirko Bibic said in a statement.

“Our focus this quarter, and throughout 2024, has been to attract higher-margin subscribers and reduce costs to help offset short-term revenue impacts from sustained competitive pricing pressures, slow economic growth and a media advertising market that is in transition.”

Operating revenue for the quarter totalled $5.97 billion, down from $6.08 billion in its third quarter of 2023.

BCE also said it now expects its revenue for 2024 to fall about 1.5 per cent compared with earlier guidance for an increase of zero to four per cent.

The company says the change comes as it faces lower-than-anticipated wireless product revenue and sustained pressure on wireless prices.

BCE added 33,111 net postpaid mobile phone subscribers, down 76.8 per cent from the same period last year, which was the company’s second-best performance on the metric since 2010.

It says the drop was driven by higher customer churn — a measure of subscribers who cancelled their service — amid greater competitive activity and promotional offer intensity. BCE’s monthly churn rate for the category was 1.28 per cent, up from 1.1 per cent during its previous third quarter.

The company also saw 11.6 per cent fewer gross subscriber activations “due to more targeted promotional offers and mobile device discounting compared to last year.”

Bell’s wireless mobile phone average revenue per user was $58.26, down 3.4 per cent from $60.28 in the third quarter of the prior year.

This report by The Canadian Press was first published Nov. 7, 2024.

Companies in this story: (TSX:BCE)

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Business

Canada Goose reports Q2 revenue down from year ago, trims full-year guidance

Published

17 hours ago

November 7, 2024

Anne Joseph

TORONTO – Canada Goose Holdings Inc. trimmed its financial guidance as it reported its second-quarter revenue fell compared with a year ago.

The luxury clothing company says revenue for the quarter ended Sept. 29 totalled $267.8 million, down from $281.1 million in the same quarter last year.

Net income attributable to shareholders amounted to $5.4 million or six cents per diluted share, up from $3.9 million or four cents per diluted share a year earlier.

On an adjusted basis, Canada Goose says it earned five cents per diluted share in its latest quarter compared with an adjusted profit of 16 cents per diluted share a year earlier.

In its outlook, Canada Goose says it now expects total revenue for its full financial year to show a low-single-digit percentage decrease to low-single-digit percentage increase compared with earlier guidance for a low-single-digit increase.

It also says it now expects its adjusted net income per diluted share to show a mid-single-digit percentage increase compared with earlier guidance for a percentage increase in the mid-teens.

This report by The Canadian Press was first published Nov. 7, 2024.

Companies in this story: (TSX:GOOS)

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