Earnings Season Heats Up: Tesla in the Spotlight
This week marks a crucial moment in the earnings season, with several major companies set to release their quarterly results. All eyes will be on Tesla, as the electric vehicle maker is expected to post revenue of $29.73 billion and EPS of $0.86. The company’s gross margin is also expected to come in at 18.77%.
A Critical Period for Tesla
Tesla faces a critical 12-18 month period, as its investments in self-driving technology reach a point where significant progress is needed to maintain its valuation premium. While some analysts are optimistic about the company’s prospects, others are more cautious. Richard Durant, an analyst with a Sell rating on the stock, notes that the business “faces a critical 12-18 month period” and that “the results aren’t particularly encouraging so far.”
A Bullish Outlook
On the other hand, Oliver Rodzianko is more optimistic about Tesla’s prospects. He notes that the company’s recent “We, Robot” event was a success, despite the precipitant stock decline. “Not only does it show Tesla investors and customers that the company’s plans have a substantial grounding, but the company should be commended for how quickly it embraced a full pivot to autonomous taxis,” he said.
Other Earnings Releases
In addition to Tesla, several other major companies will release their earnings this week. On Monday, Nucor and Logitech will report, followed by General Electric, Philip Morris, Verizon, Texas Instruments, Lockheed Martin, General Motors, and 3M on Tuesday. Coca-Cola, T-Mobile, IBM, AT&T, and Boeing will join Tesla on Wednesday, while Valero, UPS, Honeywell, American Airlines, Northrop Grumman, Southwest Airlines, and Dow will issue results on Thursday.
Durable Goods Orders
On the economic front, September durable goods orders will garner the most attention. Economists expect a -0.9% decline in the headline number and a -0.1% drop in core orders, ex transportation. Wells Fargo economists note that “durable goods orders have been volatile in recent months primarily due to swings in aircraft orders.”
Boeing Reaches Tentative Agreement
In other news, Boeing has reached a tentative agreement with a union representing around 30,000 employees. The deal, which includes a 35% pay hike over four years, could end a more-than-month-long strike that has disrupted production.
TGI Friday’s Seeks Financing
TGI Friday’s, the bar/restaurant chain, is seeking financing as it prepares to file for bankruptcy in the coming weeks. The company is in talks with lenders to search for a loan that would let it continue running its restaurants through the Chapter 11 process and emerge as an operating company.
Income Investors Take Note
For income investors, companies with an ex-dividend date coming next week include Caterpillar, CVS Health, Lowe’s, Clorox, and Fastenal. Companies forecast to increase their quarterly dividend payouts include Smurfit Westrock, Hartford Financial Services Group, Entergy, and American Electric Power.
UBS Upgrades US Equities
Finally, UBS Global Wealth Management has upgraded its view on US equities, citing growing adoption of artificial intelligence technology. David Lefkowitz, head of equities Americas, notes that “from a macro perspective, the combination of slowing but durable economic growth, healthy earnings growth, and continued Fed rate cuts are all supportive.”
Leave a Reply