Tesla
stock closed higher for a fourth straight day on Friday, offering a little relief for investors have held it as it has slid to start 2024. The recent trading action, however, isn’t exactly what shareholders should want.
Tesla stock closedup 2.1% at $193.57, while the
S&P 500
and
Nasdaq Composite
were up 0.6% and 1.3%, respectively.
Lucid Group
was up 0.3%,
NIO
shares gained 1.8%.
BYD
stock lost 0.7% in Hong Kong trading.
General Motors dropped 0.2%.
Part of the reason could be that New Street Research analyst Pierre Ferragu wrote Friday that he sees Tesla shipping 8.4 million vehicles in 2030. That implies average annual growth of about 25% for the coming seven years.
A lower-priced Tesla is key to his estimate. Ferragu expects that car to be launchedin 2025 and to sell roughly 5 million units a year by the end of the decade. He is a Tesla bull, rating shares Buy. His price target is $270 a share.
Tesla stock closed Thursday at $189.65, with a gain of 1.1%, following data from China that showed Tesla’s retail car sales fell month over month in January. Tesla sold 71,447 vehicles made in the Shanghai plant last month, up about 8% year over year, according to Citi analyst Jeff Chung who tracks data from the China Passenger Car Association.
Tesla shipped 94,139 units from its Shanghai plant in December, a seasonally strong month for car shipments.
Tesla stock was still down 22% for the year at Friday’s close, but the shares are no longer oversold. That and “overbought” are technical terms used by traders looking to see when a stock that has been going up, or down, a lot might run out of steam. An oversold stock can be due for a bounce just like an overbought stock can be due for a drop.
The formula for oversold stocks looks at average daily gains and losses over a period of time, typically 14 days. Coming into this week, Tesla stock looked severely oversold after dropping 12% in the days following its fourth-quarter numbers.
Now the trading pattern looks more normal. Tesla stock stopped being oversold on Wednesday, which isn’t necessarily great for traders or shareholders. It can mean no big bounce is coming.
Shareholders would prefer a rebound after the tough start to the year. Tesla stock has underperformed the Nasdaq by some 29 percentage points year to date.
Closing that gap, however, will take improving profit margins. Price cuts have hurt Tesla’s margins. Fourth-quarter operating profit margin came in at about 8%, down from 16% a year earlier.
Write to Al Root at [email protected] and Rupert Steiner at [email protected]
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