Tesla beat analyst estimates for fourth-quarter profit and revenue Wednesday afternoon, and the subsequent stock spike prolonged the automaker’s strong rally in 2020.
The company announced its Model Y CUV would reach delivery sooner than expected, and projected it would „comfortably exceed“ 500,000 total deliveries in 2020, a 36% gain from last year’s figure.
The earnings win saw Tesla shares jump as much as 12% to hit a record-high price of $650.88 per share.
Here’s what four analysts said about the soaring stock price and fourth-quarter earnings win.
Tesla bested analyst estimates with its fourth-quarter report on Wednesday afternoon, prolonging its stock surge through 2020 and easing fears of a continued supply struggle.
The automaker’s stock soared as much as 12% Thursday following the blockbuster report. Tesla beat expectations for both quarterly profit and revenue, and noted its 2020 deliveries would „comfortably exceed“ 500,000 vehicles compared to 2019’s 367,500.
The company also accelerated the rollout of its Model Y CUV, saying a „production ramp“ started in January and deliveries would begin by the end of March.
The earnings win drove Tesla shares to an all-time high of $650.88 per share. The stock has already notched several record highs through the new year, granting a hefty compensation package for CEO Elon Musk and establishing the firm as the highest-valued automaker in the US.
Tesla traded at $640.50 per share as of 3:10 p.m. ET Thursday, up about 55% year-to-date.
Here’s what four analysts have to say about Tesla after its positive fourth-quarter figures and surging stock price.
Piper Sandler: „Tesla’s thriftiness continues to impress“
Foto: sourceTesla
Price target: $729
Rating: Overweight
Tesla’s frugality helped the automaker end the quarter with 6.3 billion in free cash, and its success in strategically deploying capital to boost vehicle deliveries prompted a price target upgrade from Piper Sandler’s analysts.
„Predicting capex is a challenge, but Tesla keeps under-spending our estimates, so we’re cutting our forecast to more closely reflect the company’s actual performance,“ the team wrote. „Tesla’s thriftiness continues to impress.“
The company’s strategic investments are set to push deliveries to a lofty record in 2020, and „demand remains a non-issue“ with several new models set to hit markets in the coming years, the analysts wrote.
Despite exciting launches for the Model Y, Semi, and self-driving software on the horizon, the next event to watch is Tesla’s „battery day,“ they added. Power cells are shaping up to be a limiting factor in the company’s production ramp-up, and any positive updates to battery technology or new suppliers could lift a downward pressure for the automaker.
Wedbush: „The bull party will continue“
Foto: Tesla CEO Elon Musk introduces the Cybertruck.sourceAP Photo/Ringo H.W. Chiu, File
Price target: $710
Rating: Neutral
Noted Tesla bull Dan Ives viewed the company’s latest report as „potentially game-changing,“ as stable profitability and healthy cash flow secured Tesla’s spot as a lasting player in the EV space. The 500,000-deliveries estimate is „conservatively positive,“ Ives said, and the company could deliver as many as 550,000 vehicles in 2020 and support a continued rally for the soaring stock.
„The bull party will continue as the aggressive trajectory of Giga 3 production and demand out of Shanghai look very strong out of the gate,“ the analyst wrote.
Wedbush also updated its long-term bull case for the automaker, noting that Tesla shares could reach $1,000 if it can ramp up production in Shanghai and drive demand in China in the years to come. The firm’s new Tesla price target reflects heightened demand for EVs, and past fears around improving production rates are quickly fading, the note said.
„For Musk, despite all the noise over the last year and balancing a myriad of projects at Tesla (while running SpaceX and launch targets) last night completes a „comeback story for the ages“ from the dark days seen last April,“ the team wrote.
Canaccord Genuity: „The leader of the EV revolution“
Foto: Elon Musk at the unveiling of Tesla’s new RoadstersourceTesla
Price target: $750
Rating:
Canaccord Genuity now stands as Wall Street’s biggest Tesla bull, with their latest price target implying a 16% upside from Thursday’s opening price. Though the new target is based on a lofty 2021 EPS projection of $25.03, the firm believes Tesla’s opportunity in „disrupting the legacy transportation industry“ warrants such rapid profit growth.
The analysts also praised Tesla’s advantage in the battery, echoing other firms in emphasizing the importance of its upcoming battery tech event. The automaker’s „greatest near-term risk“ is its Shanghai factory’s exposure to the coronavirus, the analysts noted. If the outbreak is efficiently contained in the coming weeks, Tesla is on pace to reach numerous records in the new year, Canaccord Genuity added.
„Given the numerous positive data points that were discussed and the cornerstone of of continued profitability and free cash flow generation, we view the company as solidly positioned as the leader of the EV revolution,“ the analysts wrote.
CFRA Research: „Unfavorable at current levels“
Foto: Tesla Inc CEO Elon Musk poses with Tesla China-made Model 3 vehicle owners onstage during a delivery event at its Shanghai factory in China January 7, 2020.sourceREUTERS/Aly Song
Price target: $440
Rating: Sell
Despite the massive earnings beat, not all firms lifted their doubts on Tesla’s future growth. The stock’s current risk/reward scenario is „unfavorable at current levels,“ and risks surrounding the Chinese factory’s ramp-up could quickly pull shares lower, CFRA analyst Garrett Nelson wrote.
Tesla failed to report capex figures related to its new factory in Germany, Nelson said, leaving investors in the dark as to whether the facility reaches regular production as efficiently as the Shanghai factory. The analyst downgraded Tesla stock to „sell“ from „hold,“ and his new price target implies a 32% tumble from its Thursday opening price.
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Human Resources Officers must be very busy these days what with the general turnover of employees in our retail and business sectors. It is hard enough to find skilled people let alone potential employees willing to be trained. Then after the training, a few weeks go by then they come to you and ask for a raise. You refuse as there simply is no excess money in the budget and away they fly to wherever they come from, trained but not willing to put in the time to achieve that wanted raise.
I have had potentials come in and we give them a test to see if they do indeed know how to weld, polish or work with wood. 2-10 we hire, and one of those is gone in a week or two. Ask that they want overtime, and their laughter leaving the building is loud and unsettling. Housing starts are doing well but way behind because those trades needed to finish a project simply don’t come to the site, with delay after delay. Some people’s attitudes are just too funny. A recent graduate from a Ivy League university came in for an interview. The position was mid-management potential, but when we told them a three month period was needed and then they would make the big bucks they disappeared as fast as they arrived.
Government agencies are really no help, sending us people unsuited or unwilling to carry out the jobs we offer. Handing money over to staffing firms whose referrals are weak and ineffectual. Perhaps with the Fall and Winter upon us, these folks will have to find work and stop playing on the golf course or cottaging away. Tried to hire new arrivals in Canada but it is truly difficult to find someone who has a real identity card and is approved to live and work here. Who do we hire? Several years ago my father’s firm was rocking and rolling with all sorts of work. It was a summer day when the immigration officers arrived and 30+ employees hit the bricks almost immediately. The investigation that followed had threats of fines thrown at us by the officials. Good thing we kept excellent records, photos and digital copies. We had to prove the illegal documents given to us were as good as the real McCoy.
Restauranteurs, builders, manufacturers, finishers, trades-based firms, and warehousing are all suspect in hiring illegals, yet that becomes secondary as Toronto increases its minimum wage again bringing our payroll up another $120,000. Survival in Canada’s financial and business sectors is questionable for many. Good luck Chuck!. at least your carbon tax refund check should be arriving soon.
NORMAN WELLS, N.W.T. – Imperial Oil says it will temporarily reduce its fuel prices in a Northwest Territories community that has seen costs skyrocket due to low water on the Mackenzie River forcing the cancellation of the summer barge resupply season.
Imperial says in a Facebook post it will cut the air transportation portion that’s included in its wholesale price in Norman Wells for diesel fuel, or heating oil, from $3.38 per litre to $1.69 per litre, starting Tuesday.
The air transportation increase, it further states, will be implemented over a longer period.
It says Imperial is closely monitoring how much fuel needs to be airlifted to the Norman Wells area to prevent runouts until the winter road season begins and supplies can be replenished.
Gasoline and heating fuel prices approached $5 a litre at the start of this month.
Norman Wells’ town council declared a local emergency on humanitarian grounds last week as some of its 700 residents said they were facing monthly fuel bills coming to more than $5,000.
“The wholesale price increase that Imperial has applied is strictly to cover the air transportation costs. There is no Imperial profit margin included on the wholesale price. Imperial does not set prices at the retail level,” Imperial’s statement on Monday said.
The statement further said Imperial is working closely with the Northwest Territories government on ways to help residents in the near term.
“Imperial Oil’s decision to lower the price of home heating fuel offers immediate relief to residents facing financial pressures. This step reflects a swift response by Imperial Oil to discussions with the GNWT and will help ease short-term financial burdens on residents,” Caroline Wawzonek, Deputy Premier and Minister of Finance and Infrastructure, said in a news release Monday.
Wawzonek also noted the Territories government has supported the community with implementation of a fund supporting businesses and communities impacted by barge cancellations. She said there have also been increases to the Senior Home Heating Subsidy in Norman Wells, and continued support for heating costs for eligible Income Assistance recipients.
Additionally, she said the government has donated $150,000 to the Norman Wells food bank.
In its declaration of a state of emergency, the town said the mayor and council recognized the recent hike in fuel prices has strained household budgets, raised transportation costs, and affected local businesses.
It added that for the next three months, water and sewer service fees will be waived for all residents and businesses.
This report by The Canadian Press was first published Oct. 21, 2024.
TORONTO – A new report says many Canadian business leaders are worried about economic uncertainties related to the looming U.S. election.
The survey by KPMG in Canada of 735 small- and medium-sized businesses says 87 per cent fear the Canadian economy could become “collateral damage” from American protectionist policies that lead to less favourable trade deals and increased tariffs
It says that due to those concerns, 85 per cent of business leaders in Canada polled are reviewing their business strategies to prepare for a change in leadership.
The concerns are primarily being felt by larger Canadian companies and sectors that are highly integrated with the U.S. economy, such as manufacturing, automotive, transportation and warehousing, energy and natural resources, as well as technology, media and telecommunications.
Shaira Nanji, a KPMG Law partner in its tax practice, says the prospect of further changes to economic and trade policies in the U.S. means some Canadian firms will need to look for ways to mitigate added costs and take advantage of potential trade relief provisions to remain competitive.
Both presidential candidates have campaigned on protectionist policies that could cause uncertainty for Canadian trade, and whoever takes the White House will be in charge during the review of the United States-Mexico-Canada Agreement in 2026.
This report by The Canadian Press was first published Oct. 22, 2024.
