Tesla Bulls take heart from high profits

news7g01/26/2023

11 6 minutes read

Tesla Bulls take heart from high profits

Investors are once again bullish on Tesla

Tesla investors are feeling excited Electric car maker earnings release on Wednesday, it has a lot to like about it: quarterly profits are up 59% year-over-year, and demand for its vehicles is growing. Shares of Tesla jumped nearly 7% in premarket trading on Thursday.

However, even with the company’s own admission, it is facing a plethora of challenges, from increasing competition to rising interest rates. (And, some critics will add, the job of the head is Elon Musk in is different jobs, including running Twitter.)

The results turned out to be an extremely uneventful year for Tesla. Share prices fell 65% last year – wiping out about $685 billion in market value – amid investor fears of a global recession, the end of cheap car finance and lose market share in key markets like China. Shareholders are also worried whether Mr. Musk will sell more of his stake in the carmaker to support Twitter.

But Tesla has pointed to its results as proof that it is pursuing a successful strategy. It reported $3.7 billion in profit and $21.3 billion in auto sales for the quarter. The price drop has helped lift demand, giving investors hope: Tesla stock is up 33% since the start of the month, making it one of the best performing stocks on the S&P 500. ( Morgan Stanley auto analyst Adam Jonas, a longtime Tesla bull, names the company His top pick among car stocks for a year.)

There are still warning signs. While the price cuts have helped boost sales, they are eroding Tesla’s profit margins. And while vehicle deliveries rose to 405,000 in the fourth quarter, the number was still lower than both Tesla and Wall Street’s forecasts. While Mr. Musk predicts that the company will produce 1.8 million new vehicles this year – including the long-awaited Cybertruck – that rate is far below his long-term production target. .

Investors are also eyeing other risks:

Long-standing rivals such as Hyundai, Ford, GM and Volkswagen are selling more battery-powered cars at lower prices, while upstarts like China’s BYD are flourishing.
While Tesla will begin production of the Cybertruck this year, it won’t reach significant numbers until 2024, giving Rivian and Ford more time to establish a larger lead with its products. surname.
Meanwhile, the efforts of Senator Joe Manchin, Democrat of West Virginia, to Defer new tax credits for electric vehicles could reduce demand for battery-powered vehicles.
And Mr. Musk doesn’t seem to want to step back from running Twitter beyond Tesla, or even dialing in his often provocative presence on the platform, as some reviewers have claimed. “Twitter is really an incredible tool to drive demand,” he told analysts, touting his 127 million followers.

THIS IS WHAT’S HAPPENING

Meta will restore Donald Trump’s account. When to let the former president back to Facebook and Instagram, the company cites the end of a two-year suspension imposed after the January 6 attack on the Capitol. But Trump’s return will come with new defenses to “prevent recidivism,” Meta said.

US economic data is expected to show continued growth. Economists expect that fourth quarter gross domestic product up 2.8% on an annualized basis, down slightly from the previous quarter, as inflation eased and the job market remained relatively strong. (The report is scheduled for release at 8:30 a.m. Eastern time.) More and more economists, however, are growing. expect a recession in the second half of the year.

Southwest Airlines reported a loss of $220 million per quarter. Airlines rise up great loss to the costs associated with its disastrous holiday season, when it canceled about 16,700 flights. Southwest also forecast a loss for the first quarter.

The White House is about to have its next top economic adviser. Among those up for Director of the National Economic Council is Lael Brainard, vice chairman of the Fed; Wally Adeyemo, deputy treasury secretary; and Gene Sperling, who held the position under Bill Clinton and Barack Obama. The current director, Brian Deese, is expected to step down soon.

Adani Group suffered after being targeted by a short seller. Stocks and bonds in Indian group companies fell after Hindenburg Research accused the group of fraud; the founder of the group, Gautam Adani, saw $5.5 billion wiped his net worth someday. However, analysts say that a $2.5 billion worth of shares sold by the flagship company of the Adani Group is likely to pass.

Exclusive: Ranking banks based on their AI prowess

Artificial intelligence is one of the hottest topics right now, thanks to developments like the ChatGPT chatbot. But it is also being adopted by global banks for a variety of uses ranging from market and trading analysis to regulatory compliance.

A new data intelligence startup, Apparent, is set to launch an index showing how the top 23 banks in North America and Europe stand in terms of technology mix and development. Apparently gave an exclusive first look at its findings to DealBook.

How Evident compiles its rankings: The company analyzed publicly available data sources — from press releases to research papers to employment data on sites like LinkedIn and Glassdoor — to evaluate companies across four areas: innovation. innovation, leadership, transparency and attracting and developing talent. About 50 AI experts were also consulted.

This approach stems from the experience of Evident co-founders Alexandra Mousavizadeh and Annabel Ayles, who previously worked on an index that measures countries’ AI efforts at Tortoise Media. (Advocates of the evidence include Scott Galloway, NYU professor and podcaster, and Gary Ginsberg, a former political official and media executive.)

Who goes first? Here are the top 10 banks:

JPMorgan Chase
Royal Bank of Canada
Citigroup
UBS
Wells Fargo
Bank of Toronto-Dominion
ING GROUP
american bank
BNP Paribas
Morgan Stanley

JPMorgan dominates in all four categories, thanks to what Mousavizadeh calls the banking giant’s yearlong commitment to invest heavily in technology, including publishing hundreds of research and analysis papers incorporate it into your business.

Ayles added that banks — and regulators, investors, and potential new hires alike — would benefit from seeing how they are performing compared to their AI and peers. points they can improve.

There are some surprising trends, Apparently told DealBook. Among them:

Canada’s top banks ranked highly, beating the likes of Goldman Sachs and Morgan Stanley, thanks in large part to their senior leaders’ commitment to advancing AI.
Wells Fargo is rising above its weight class and has recruited some AI experts from rivals like Bank of America.
European banks rank low. While they draw on their continent’s vast pool of AI talent, they don’t seem to be keeping up with innovation and transparency about their approach to AI development and ethics.

What’s next? Evident’s founders told DealBook that they are working on indexing banks in other regions, particularly China. They say that could lead to some interesting comparisons based on the country’s strength in developing and using AI in a range of businesses. And the company is also preparing indexes for other sectors, including insurance.

“Jeff is extremely dedicated to his training. I mean, you have no idea. He really puts in the work.

— Lauren Sanchezformer news anchor, in her first personal interview since it was reported that she was romantically linked to Jeff Bezos, the founder of Amazon.

Kohl’s close to a deal for a full-time director

Retailer Kohl’s is about to name Tom Kingsbury, its interim CEO, as its permanent leader, reported by Lauren Hirsch of DealBook and Jordyn Holman of The Times. (The company has yet to make a final decision.) His appointment could provide a measure of stability for the department store chain, whose shares have fallen nearly 50% in the past year — and resist pressure. more from investors.

Kohl’s faces a number of challenges, including a continuation from an unsuccessful selling attempt that ended last year and pressure from active investors. In December during the important holiday season, its former CEO, Michelle Gassleft to join Levi Strauss & Company.

Perhaps most importantly, middle-income Americans, Kohl’s core customers, have stopped shopping as they grapple with rising inflation. November, company withdraw full-year guidance for 2022citing the precarious economy and the departure of Gass.

Mr. Kingsbury can focus on improving sales, not selling the company. He has four decades of retail experience, including running the Burlington Store for just over a decade; Kohl’s chairman, Peter Boneparth, praised him as an “outstanding and highly regarded operator with a profound focus on inventory management.”

Mr Kingsbury can also help prevent a proxy war with active investors, said analysts at Morningstar. In October, Kohl’s faced the prospect of a fresh battle with active investor Macellum Advisors, which was seeking board seats and the ousting of Boneparth. But Kingsbury is a well-known figure for Macellum, having joined Kohl’s board in 2021 as part of a deal with the operating fund.