Tesla (TSLA) Fires Then Hires? Chinese Tariffs Could Benefit Stock

Schwab Network
13 May 202406:32

TLDRTesla's stock is up 1.8% despite a challenging year with a 31% drop. The company has introduced a promotional APR on Model Y purchases to boost demand. Contrary to recent layoffs, Tesla is reportedly rehiring some workers from the supercharging team. The Biden administration is considering imposing tariffs on Chinese EVs, potentially benefiting Tesla. Analysts' opinions on Tesla are divided, with price targets ranging from $22 to $310, reflecting the stock's volatility and the market's uncertainty about its future performance.

Takeaways

  • 📈 Tesla's stock price is up by about 1.8% during the session, despite being down about 31% for the year.
  • 🚗 Tesla has introduced a promotional rate of 0.99% APR on qualifying Model Y purchases, which could stimulate demand.
  • 🔥 There's been a report of Tesla's 'fire and hire' strategy, where some previously laid-off workers are being rehired.
  • 💡 The Biden administration is reportedly considering substantial tariffs on Chinese EVs, potentially benefiting Tesla's stock.
  • 📉 Tesla shares have seen a rough May, with a decline of about 6%, but have snapped a four-day losing streak.
  • 💼 Analysts have varied opinions on Tesla, with some recommending a 'sell', others a 'buy', and some maintaining a 'neutral' stance.
  • 🤔 The impact of the proposed Chinese EV tariffs seems to be more symbolic than substantial, as China doesn't rely on the US market for EV sales.
  • 📉 Tesla's stock has been volatile, with gains over a one-month timeframe but losses over three and six months.
  • 🏦 There's a wide range of price targets for Tesla from different analysts, from as low as $22 to as high as $310.
  • 📊 Tesla's stock is polarizing, with analysts split between 'buy' and 'hold', and a median price target of $17,750.
  • 🔍 Despite the volatility and differing analyst opinions, Tesla remains a company of interest with significant market coverage.

Q & A

  • What is the current performance of Tesla's stock?

    -Tesla's stock is up about 1.8% on the session, but it's down about 31% on the year.

  • What is the promotional rate Tesla introduced for Model Y purchases?

    -Tesla introduced a promotional rate of 0.99% Annual Percentage Rate on qualifying Model Y purchases, which is significantly below market rates.

  • Why did Tesla's stock price increase recently?

    -The stock price increase could be attributed to the promotional rate on Model Y purchases, the 'fire and hire' strategy where some employees were rehired, and potential tariffs on Chinese EVs that might benefit Tesla.

  • What is the reported 'fire and hire' strategy by Tesla?

    -Tesla reportedly let go of 500 workers from the supercharging team and then decided to bring some of them back, according to a Bloomberg report.

  • What is the potential impact of the Biden administration's tariffs on Chinese EVs?

    -The tariffs are expected to be hiked to 102.5% from about 27.5%. However, it's suggested that these tariffs might be more symbolic than meaningful, as China doesn't rely on the US market for its EV sales.

  • How do analysts view Tesla's current quarterly deliveries?

    -Guggenheim analysts believe that Tesla's current quarterly deliveries are tracking well below their 440,000 estimate, maintaining a bearish rating on the stock.

  • What is the price target for Tesla set by Guggenheim?

    -Guggenheim has set a price target of $126 for Tesla, which is below the current share price.

  • How do different analysts rate Tesla's stock?

    -Analysts have varied ratings for Tesla, with some suggesting a buy, others a sell, and others a hold. The median price target is around $17,750.

  • What is the lowest price target for Tesla among analysts?

    -The lowest price target for Tesla is $22, set by Gordon Johnson, who is known for his bearish stance on the stock.

  • What is the highest price target for Tesla among analysts?

    -The highest price target for Tesla is $310, as set by Morgan Stanley.

  • Why is Tesla considered a polarizing stock among analysts?

    -Tesla is considered polarizing due to the wide range of opinions and price targets among analysts, with some being very bullish and others very bearish, even during times when the company is performing well.

  • How does the script describe the current state of Tesla's stock volatility?

    -The script describes Tesla's stock as overly volatile and quick moving, with no consistent trend, and a stock that no one seems to agree on.

Outlines

00:00

📈 Tesla's Stock Performance and Market Dynamics

The first paragraph discusses Tesla's stock performance, which is up by 1.8% at the time of the discussion. Despite being down by about 31% for the year, there is a positive start to the week. The conversation includes various factors influencing Tesla's stock price, such as analyst news, a fire-and-hire strategy where some previously laid-off employees are being rehired, and a promotional rate of 0.99% APR on qualifying Model Y purchases to stimulate demand. Additionally, the paragraph touches on the potential impact of the Biden administration's consideration of increased tariffs on Chinese EVs and the mixed analyst ratings and price targets for Tesla, highlighting the stock's volatility and the differing opinions among financial experts.

05:00

🤔 Analyst Sentiments on Tesla's Future

The second paragraph delves into the varied analyst sentiments regarding Tesla. It highlights the split among analysts covering the company, with 20 giving a 'buy' rating, 21 a 'hold' rating, and 10 a 'sell' rating, resulting in a median price target of $17,750. The discussion points out the difficulty in predicting Tesla's performance based on analyst commentary alone, given the company's history of defying expectations. The paragraph also notes the wide range of price targets, from a low of $22 to a high of $310, reflecting the polarized views on Tesla's prospects among financial analysts.

Mindmap

Keywords

💡Tesla (TSLA)

Tesla, Inc. (TSLA) is an American electric vehicle and clean energy company known for its electric cars, solar energy products, and battery storage solutions. In the script, Tesla is discussed in the context of its stock performance, employee strategies, and potential impact from Chinese tariffs. It is a central topic as the video focuses on the factors driving Tesla's stock price.

💡FOMO

FOMO stands for 'Fear of Missing Out', a feeling of anxiety that one might miss out on an opportunity. In the context of the video, it refers to the sentiment around Tesla's stock, suggesting that investors might be experiencing FOMO due to the stock's movement and various news surrounding the company.

💡Annual Percentage Rate (APR)

The Annual Percentage Rate (APR) is the cost of borrowing money expressed as a yearly rate. It includes interest as well as other fees. In the script, Tesla introduces a promotional APR of 0.99% on qualifying Model Y purchases, which is significantly lower than market rates, aiming to drive sales volume in a sluggish demand environment for electric vehicles (EVs).

💡Fire and Hire Strategy

This term refers to the practice of letting go of employees and then rehiring them, often under different terms or conditions. The script mentions that Tesla, under Elon Musk's leadership, has implemented this strategy, particularly with the supercharging team, which could suggest a change in the company's operational approach or a response to market conditions.

💡Chinese Tariffs

Tariffs are taxes imposed on goods being imported or exported. The script discusses the Biden administration's consideration of imposing substantial tariffs on Chinese electric vehicles (EVs), which could impact Tesla's competition and potentially benefit Tesla's stock if it makes their vehicles more competitive in the market.

💡EVs (Electric Vehicles)

Electric Vehicles (EVs) are vehicles that use electric motors for propulsion rather than internal combustion engines. The script frequently mentions EVs, particularly in the context of Tesla's Model Y and the broader market for electric vehicles, which is affected by factors like tariffs and consumer demand.

💡Stock Price

The stock price is the cost at which shares of a company are bought or sold in the stock market. The video discusses Tesla's stock price in relation to various factors such as analyst ratings, company strategies, and market conditions. The stock price is a critical metric for investors as it reflects the market's perception of the company's value.

💡Analyst Ratings

Analyst ratings are the recommendations made by financial analysts regarding the future performance of a stock. The script references multiple analyst ratings for Tesla, including 'sell', 'buy', and 'hold', which show a wide range of opinions on the company's prospects. These ratings can influence investor decisions and stock price movements.

💡Promotional Rate

A promotional rate is a special, often lower, interest rate offered for a limited time to attract customers. In the context of the script, Tesla offers a promotional rate of 0.99% APR on Model Y purchases, which is intended to stimulate sales by making the financing more attractive to potential buyers.

💡Sluggish Demand

Sluggish demand refers to a slow or weak market demand for products or services. The script mentions a sluggish demand environment for EVs, indicating that the market for electric vehicles is not as robust as desired, which could be a factor in Tesla's decision to offer a promotional rate.

💡Meme Stock

A meme stock is a stock that experiences a significant increase in trading volume or price due to activity on social media platforms, often driven by retail investors. The script suggests that Tesla, despite being a larger and more established company, has some characteristics of a meme stock due to its high volume of options trading and volatile price movements.

Highlights

Tesla's stock is up about 1.8% on the session, a positive start to the week despite being down 31% on the year.

Tesla introduced a promotional rate of 0.99% APR on qualifying Model Y purchases, a significant drop from previous rates as high as 6.5%.

The promotional rate is expected to drive volume in a sluggish demand environment for electric vehicles (EVs).

Bloomberg reports that Tesla is bringing back some of the 500 workers from the supercharging team that were recently laid off.

The Biden administration is considering substantial tariffs on Chinese EVs, potentially increasing them to 102.5% from 27.5%.

The proposed tariffs may be more symbolic than impactful, as China does not rely on the US market for EV sales.

US-listed shares of Chinese EV companies like Li Nio, Xpeng, and BYD are showing strength, not weakness, following the tariff report.

Guggenheim has reiterated its sell rating on Tesla, with a price target of $126, indicating a bearish outlook.

Tesla's stock has been volatile, with different time frames showing mixed performance over the past months.

Analysts' opinions on Tesla are highly polarized, with ratings ranging from buy to sell and price targets varying significantly.

Tesla's stock has a short-term trading dynamic, similar to meme stocks, despite being a larger and more established company.

There are 51 analysts covering Tesla, with a median price target of $17,750, indicating a limited upside from current trading levels.

Tesla's stock performance has been challenging to predict based on analysts' commentary, as they have been inconsistently accurate.

Tesla's stock has experienced significant fluctuations, even when it was one of the highest rated in the S&P last year.

The news cycle around Tesla is always active, providing a constant stream of headlines that can influence stock price.

Tesla's stock price is influenced by a variety of factors, including promotional rates, employment strategies, and potential trade tariffs.

Despite the negative note from Guggenheim, Tesla's stock is showing gains, indicating that the market may not be fully aligned with the analysts' views.

The potential impact of tariffs on Chinese EVs may be offset by the strength of US-listed shares of Chinese companies, suggesting a complex market dynamic.

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