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Where do Tesla (TSLA - Free Report) , the company — and Tesla’s inflated share price — go from here?
I don’t think those two components are separate.
They never are.
Tesla, the company -- and Tesla, the share price -- are particularly interwoven. Explicitly so.
They are interwoven by the steady chop of globalized media reports, the eponymous statements coming out of the founder of the company, thick covering analyst commentary, and hordes of Tesla aficionado tweets, in this circumstance.
Let’s see what we can learn from recent Zacks.com writing.
A Tesla Share Update
According to our Zacks.com covering analyst, Tesla is the market leader in battery-powered electric car sales in the United States, with a roughly 70% market share.
The company's flagship Model 3 is the best-selling Electric Vehicle (EV) model in the United States.
Tesla, which has managed to garner the reputation of a gold standard over the years, is now a far bigger entity that what it started off since its IPO in 2010, with its market cap crossing $1 trillion for the first time in October 2021.
The EV king's market capitalization is more than the combined value of legacy automakers, including Toyota, Volkswagen, Daimler, General Motors and Ford.
Over the years, Tesla has shifted from developing niche products for affluent buyers to making more affordable EVs for the masses.
The firm's three-pronged business model approach of direct sales, servicing and charging its EVs sets it apart from other carmakers.
Tesla, which is touted as the clean energy revolutionary automaker, is much more than just a car manufacturer.
Next, I show you the key Zacks chart for studying any share price:
Image Source: Zacks Investment Research
Recently, TSLA shares have pulled back to early 2021 support levels. The chart above also shows that the company has beaten on consensus earnings estimates for five consecutive quarters now. The five years of earnings trends are nicely upwards sloping.
Second, I will follow up on this summary chart, with Tesla’s earnings magnitude table.
This is a key reference, to establish the underlying health of any company’s earnings fundamentals growth. F1 is 2022 and F2 is 2023 annual earnings for Tesla.
Image Source: Zacks Investment Research
As you can see in the green lines shown above, both 2022 and 2023 earnings estimate revisions (+12.74%) and (+7.07%), undertaken by the ten strong Tesla covering analyst community over the last 60 days, have been positive. The Forward 12M P/E? This is 69.
The bull community view? This is best expressed by a fan.
Sawyer Merritt’s tweet—
“Tesla hasn't even begun to scratch the surface on how successful the Model Y will become. It's selling well in the U.S., but wait until Giga Berlin and Shanghai start pumping these things out.”
“It will be global domination. Tesla's competitors will start to bleed market share.”
The bear community view? This is best summarized by solid car industry analysis.
Exclusive from JATO — whose vision is to be the world’s most exciting leader in automotive business intelligence:
“Tesla led the global EV market through September 2021, but lost market share versus 2020, as competitors are getting stronger.”
“The 2nd largest EV seller was SAIC-GM-Wuling, the Chinese Joint Venture (JV) that successfully sells the Wuling Hongguang Mini EV, China's top-selling electric car.”
I think the Tesla share price decline, of late, is starting to reflect/anticipate still more lost EV market share. From the long list of ever-strengthening global EV competitors.
Zacks June Sector/Industry/Company Telescope
Zacks Ranks offer a lonely Very Attractive sector. Again, it is Energy. These industries maintain significant strength from high oil and natural gas prices, spurred by broad Russian sanctions.
Two S&P500 sectors (Materials & Health Care) remained Attractive. The Medical Care industry remains solid. Steel and Paper are other solid industries.
Financials and Utilities rose this month to Market Weighs. Banks & Thrifts and Gas Distribution looked the strongest.
Info Tech fell to an Unattractive sector in June. Electronics and Office Equipment keep market ratings. Semis fell. There is worry about the Semi sector traditionally overbuilding, once again.
Both Consumer Staples and Consumer Discretionary are now Very Unattractive. This is showing the negative influences of high consumer prices, across the board.
(1) Energy is clearly the top sector and stays firmly at Very Attractive in June. Tops are Coal, the big Oil & Gas Integrated firms, Oil & Gas E&P, Oil & Gas Pipelines and Oil Misc.
Zacks #1 Rank (STRONG BUY): Canadian Natural Resources, Ltd. CNQ
(2) Materials remained Attractive. Steel and Paper the best niches to mine.
(4) Industrials falls from Attractive to Market Weight. Metal Fabricating and Pollution Control (Biden infrastructure?) and best. Transport, Conglomerates and Transport-Air were next.
(5) Financials rose to Market Weight from Unattractive. Banks & Thrifts look good. Investment Funds, Banks-Major, Real Estate & Insurance middle of the road. A broad swath of mediocrity.
(6) Utilities rose from Unattractive to Market Weight. Utilities-Gas Dist. became the leader.
(7) Info Tech fell from Market Weight to Unattractive. Electronics, and Computer-Office Equipment are middle of the road. Semis, Computer-Software, and Misc. Tech downgraded.
(8) Communications Services fell from Unattractive to Very Unattractive. Telco Equipment and Telco Services are both struggling in the latest Zacks Industry Ranks.
(9) Consumer Discretionary is now Very Unattractive. Apparel and Leisure Services, along with Media held up the best, at around Market Weight. Lots of poor groups here, now.
(10) Consumer Staples remained Very Unattractive. Bullish outlier is Agri-business (commodity prices). Poor stances for Soaps & Cosmetics, Beverages, Cons. Products Misc. Staples, and Food/Drug Retail.
Conclusion
I do think: Tesla is the ‘canary in the coal mine’ for the S&P500 index price.
Not sure either mega-cap momentum stock traders — or long-term ETF investors — want that result.
It does not matter.
The S&P500 index committee has tied all of us to Tesla’s share price.
That’s it for me.
Enjoy the rest of my June Zacks Market Strategy Report.
Warm Regards,
John Blank Zacks Chief Equity Strategist and Economist
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
As Tesla Shares Trade, So Goes the S&P 500? Zacks JUNE Strategy
The following is an excerpt from Zacks Chief Strategist John Blank’s full Jun Market Strategy report To access the full PDF, click here
Global Markets
Where do Tesla (TSLA - Free Report) , the company — and Tesla’s inflated share price — go from here?
I don’t think those two components are separate.
They never are.
Tesla, the company -- and Tesla, the share price -- are particularly interwoven. Explicitly so.
They are interwoven by the steady chop of globalized media reports, the eponymous statements coming out of the founder of the company, thick covering analyst commentary, and hordes of Tesla aficionado tweets, in this circumstance.
Let’s see what we can learn from recent Zacks.com writing.
A Tesla Share Update
According to our Zacks.com covering analyst, Tesla is the market leader in battery-powered electric car sales in the United States, with a roughly 70% market share.
The company's flagship Model 3 is the best-selling Electric Vehicle (EV) model in the United States.
Tesla, which has managed to garner the reputation of a gold standard over the years, is now a far bigger entity that what it started off since its IPO in 2010, with its market cap crossing $1 trillion for the first time in October 2021.
The EV king's market capitalization is more than the combined value of legacy automakers, including Toyota, Volkswagen, Daimler, General Motors and Ford.
Over the years, Tesla has shifted from developing niche products for affluent buyers to making more affordable EVs for the masses.
The firm's three-pronged business model approach of direct sales, servicing and charging its EVs sets it apart from other carmakers.
Tesla, which is touted as the clean energy revolutionary automaker, is much more than just a car manufacturer.
Next, I show you the key Zacks chart for studying any share price:
Image Source: Zacks Investment Research
Recently, TSLA shares have pulled back to early 2021 support levels. The chart above also shows that the company has beaten on consensus earnings estimates for five consecutive quarters now. The five years of earnings trends are nicely upwards sloping.
Second, I will follow up on this summary chart, with Tesla’s earnings magnitude table.
This is a key reference, to establish the underlying health of any company’s earnings fundamentals growth. F1 is 2022 and F2 is 2023 annual earnings for Tesla.
Image Source: Zacks Investment Research
As you can see in the green lines shown above, both 2022 and 2023 earnings estimate revisions (+12.74%) and (+7.07%), undertaken by the ten strong Tesla covering analyst community over the last 60 days, have been positive. The Forward 12M P/E? This is 69.
The bull community view? This is best expressed by a fan.
Sawyer Merritt’s tweet—
“Tesla hasn't even begun to scratch the surface on how successful the Model Y will become. It's selling well in the U.S., but wait until Giga Berlin and Shanghai start pumping these things out.”
“It will be global domination. Tesla's competitors will start to bleed market share.”
The bear community view? This is best summarized by solid car industry analysis.
Exclusive from JATO — whose vision is to be the world’s most exciting leader in automotive business intelligence:
“Tesla led the global EV market through September 2021, but lost market share versus 2020, as competitors are getting stronger.”
“The 2nd largest EV seller was SAIC-GM-Wuling, the Chinese Joint Venture (JV) that successfully sells the Wuling Hongguang Mini EV, China's top-selling electric car.”
I think the Tesla share price decline, of late, is starting to reflect/anticipate still more lost EV market share. From the long list of ever-strengthening global EV competitors.
Zacks June Sector/Industry/Company Telescope
Zacks Ranks offer a lonely Very Attractive sector. Again, it is Energy. These industries maintain significant strength from high oil and natural gas prices, spurred by broad Russian sanctions.
Two S&P500 sectors (Materials & Health Care) remained Attractive. The Medical Care industry remains solid. Steel and Paper are other solid industries.
Financials and Utilities rose this month to Market Weighs. Banks & Thrifts and Gas Distribution looked the strongest.
Info Tech fell to an Unattractive sector in June. Electronics and Office Equipment keep market ratings. Semis fell. There is worry about the Semi sector traditionally overbuilding, once again.
Both Consumer Staples and Consumer Discretionary are now Very Unattractive. This is showing the negative influences of high consumer prices, across the board.
(1) Energy is clearly the top sector and stays firmly at Very Attractive in June. Tops are Coal, the big Oil & Gas Integrated firms, Oil & Gas E&P, Oil & Gas Pipelines and Oil Misc.
Zacks #1 Rank (STRONG BUY): Canadian Natural Resources, Ltd. CNQ
(2) Materials remained Attractive. Steel and Paper the best niches to mine.
Zacks #1 Rank (STRONG BUY): Albemarle ALB
(3) Health Care remained Attractive. Medical Care made a leap upwards.
Zacks #1 Rank (STRONG BUY): AMN Healthcare Services AMN
(4) Industrials falls from Attractive to Market Weight. Metal Fabricating and Pollution Control (Biden infrastructure?) and best. Transport, Conglomerates and Transport-Air were next.
(5) Financials rose to Market Weight from Unattractive. Banks & Thrifts look good. Investment Funds, Banks-Major, Real Estate & Insurance middle of the road. A broad swath of mediocrity.
(6) Utilities rose from Unattractive to Market Weight. Utilities-Gas Dist. became the leader.
(7) Info Tech fell from Market Weight to Unattractive. Electronics, and Computer-Office Equipment are middle of the road. Semis, Computer-Software, and Misc. Tech downgraded.
(8) Communications Services fell from Unattractive to Very Unattractive. Telco Equipment and Telco Services are both struggling in the latest Zacks Industry Ranks.
(9) Consumer Discretionary is now Very Unattractive. Apparel and Leisure Services, along with Media held up the best, at around Market Weight. Lots of poor groups here, now.
(10) Consumer Staples remained Very Unattractive. Bullish outlier is Agri-business (commodity prices). Poor stances for Soaps & Cosmetics, Beverages, Cons. Products Misc. Staples, and Food/Drug Retail.
Conclusion
I do think: Tesla is the ‘canary in the coal mine’ for the S&P500 index price.
Not sure either mega-cap momentum stock traders — or long-term ETF investors — want that result.
It does not matter.
The S&P500 index committee has tied all of us to Tesla’s share price.
That’s it for me.
Enjoy the rest of my June Zacks Market Strategy Report.
Warm Regards,
John Blank
Zacks Chief Equity Strategist and Economist