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Updated March 13, 2024, 4:05 p.m. EDT
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Tesla shares plummeted to 10 on Wednesday as Wall Street became increasingly bearish on the American electric car maker and polarized Tesla’s billionaire CEO Elon Musk’s net worth plummeted. It fell to its lowest price in months.
important facts
Wells Fargo analysts call Tesla a “growth company without growth,” set a $120 price target on Tesla, expect the stock to decline 30%, and give the stock a Sell rating. Tesla shares fell 4.5% to below $170 after the price cut. This is the lowest share price since January 2023.
The landslide reduced Musk’s fortune by $4 billion to $192 billion, according to estimates by Forbes magazine, ceding him as America’s richest man to Amazon founder Jeff Bezos, whose net worth rose to $195 billion. .
Musk’s net worth and Tesla stock have both fallen dramatically this year, with Musk on Wednesday nearly $60 billion poorer than he was at the end of 2023, thanks to a 31% year-to-date decline in Tesla stock and Musk’s firing by a judge. It fell to a certain point. Record compensation package of $51 billion (Musk owns about one-fifth of Tesla stock).
Tesla overtook besieged aerospace company Boeing to become the worst-performing stock on the S&P 500 in 2024, but the stock price has fallen as Tesla’s profit margins and vehicle delivery growth simultaneously contract. It fell.
amazing facts
JPMorgan Chase & Co. on Wednesday became the latest company to surpass Tesla in market capitalization, joining weight-loss drug makers Eli Lilly, Novo Nordisk and semiconductor chip maker Broadcom. Less than two years ago, Tesla was the fifth-largest company in terms of market capitalization; now it’s the 12th-largest American company.
Contra
“Despite the dark clouds gathering, now is not the time to throw in the towel on Tesla,” Wedbush analyst Dan Ives, a longtime Tesla optimist, told clients Wednesday. I wrote it in a notebook. “We’ve been here with Musk/Tesla before,” Ives added, maintaining his $315 price target on Tesla stock, indicating nearly 90% upside.
Main background
Tesla has historically been volatile for a stock of its size, meaning the company’s investors have experienced many bumps and victory laps alike. Tesla has underperformed the S&P over the past 6 months, 1 year, 2 years, and 3 years, but is up almost 800% over the past 5 years, making it an even better bet for investors who are close to the stock’s rise. It’s bringing big profits. His 2010 initial public offering of the company marked a major win for many long-term investors. Faring even worse than Tesla on the stock market are many of its electric vehicle competitors, with Rivian, Lucid and Nio shares each down more than 70% from their 2021 highs. Still, Tesla has provided far worse returns over the last year than other innovative technology companies it was grouped with before its stock price started falling. Tesla’s -2% profit margin over the past 12 months is 17 percentage points worse than Apple’s 15% profit margin, the next worst performer among the Magnificent Seven, according to FactSet data. .
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