Earning Reports and Stock Performance 22-26th January 2024


Tesla

Tesla stocks fell more than 12% after releasing their last quarterly earnings report for 2023. The stock is now trading at its lowest price since May 2023 and is 39% lower than 2023’s highs.

The downward price movement has been triggered by the lower earnings and revenue. The company’s earnings per share were lower than expectations for the second consecutive quarter and revenue read 3% lower than expectations. The company’s earnings per share fell almost 40% compared to the previous year, but a positive figure continues to be the growth in deliveries. Tesla reported a sizeable 38% increase in deliveries last year compared to the previous year.

Another negative factor for the world’s most valuable car marker is the rise in Chinese electrical car manufacturers. The company has been cutting prices in order to increase sales, which it has, but this has impacted profitability. However, even with the price cuts, China’s BYD Auto sold more cars than Tesla in the last 3 quarters of 2023.

Previously Tesla has not had any “serious” competition which is why the company quickly grew as did the stock. However, most analysts have advised a sell for the stock after the latest earnings and increase in Chinese competition such as BYD Auto. On the other hand, if the price does continue to decline, opportunities could arise to purchase at a better entry point. Wealth Management companies have advised a price below $150 could trigger future opportunity.

Visa

Visa stocks fell 3% after the release of the company’s latest quarterly earnings report even though the latest figures beat expectations. The company has managed to beat analysts’ expectations consecutively over the past 4 quarters and revenue continues to rise. The increase in earnings has not sharply risen like other companies but the company’s earnings have been stable as has the stock. The reason for the decline was due to lower activity in the past 3 months issued within the report.

The price of the stock has risen 21% over the past 12 months and has performed better than its main competitor, Mastercard, which has risen 16%. According to analysts, the main concern for Visa will be the deterioration of the “soft landing scenario”.

Procter and Gamble

Procter and Gamble Stock has risen almost 5% this week since the latest earnings report was made public. The company recorded an 8% higher than expected earnings per share, but revenue slightly fell. Procter and Gamble is unique as it is one of the few “defensive” stocks which has seen a significantly higher earnings per share figure. As a defensive stock, the asset may attract individuals who may fear a weakening stock market in 2024-2025. Procter and Gamble stocks have risen 10% over the past 12 months and pay the highest dividend yield amongst the 4 stocks discussed in this article.

 

Netflix

Netflix stocks have been the best performer this week, rising almost 16% in a short space of time. The main upward drive was the significant increase in subscriptions and the company outperforming its competitors. However, some negatives still remain. The company’s earnings per share were 5% lower than expectations and were 43% lower than the previous quarter. Investors should also note, in terms of earnings, it was the worst in 2023 overall. However, the company revenue rose to its highest point.

Netflix has risen 54% over the past 12 months but it has yet to reach the company’s previous resistance level which was seen in 2021. Technical analysis currently points to an upward price movement, but this can change as the previous point of collapse approaches.

Michalis Efthymiou

Market Analyst

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in Leveraged Products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.



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