Shares of Tesla Inc. were down 26.5% for 2024 through Thursday.
It is one thing for investors to be disappointed at the electric-vehicle maker’s continuing series of price cuts and increasing competition from others such as BYD Co.
CN:002594
and Nio Inc.
NIO.
But even Wedbush analyst Daniel Ives, normally a relentless cheerleader for Tesla
TSLA,
called Elon Musk’s performance during the company’s earnings call on Wednesday a “train wreck.”
“We were dead wrong expecting Musk and team to step up like adults in the room on the call and give a strategic and financial overview of the ongoing price cuts, margin structure and fluctuating demand,” Ives wrote in a note to clients on Thursday.
He still rates Tesla an outperform but lowered his 12-month price target for the stock to $315 from $350. Tesla closed at $182.63 on Thursday.
In its letter to shareholders, Tesla said it was “currently between two major growth waves” and that its growth rate might be “notably lower” than it was in 2023, when the company delivered 1.8 million EVs. The company also said its production capacity had increased to an “annual run rate” of 2 million vehicles during the fourth quarter.
Claudia Assis covered Tesla’s fourth-quarter results and reaction from analysts.
More on Tesla and the competition:
Netflix on top
Netflix Inc.
NFLX
hit one out of the park when it reported late on Tuesday that its fourth-quarter sales rose 12.5% from a year earlier, with profit spiking, and that it added 13 million subscriptions, blowing past the 8.7 million consensus estimate among analysts polled by FactSet.
Therese Poletti details how the streaming pioneer’s newer advertising-supported subscriptions are driving increases in revenue and subscriptions.
Investors were thrilled with Netflix’s blowout quarter, sending the shares up 11% Wednesday and adding another 3% Thursday, when the stock closed at $562.
Emily Barry explains why Deutsche Bank downgraded Netflix to a neutral rating following the earnings report. Other analysts maintained positive ratings.
Here’s a deep look for investors at the 19 companies in the S&P 500 communications services sector, which includes Netflix, its streaming competitors, other content creators and social-media companies. Based on consensus price targets, there are six companies for which analysts expect double-digit share-price rises over the next year; Netflix isn’t one of them.
More communications sector coverage:
- Comcast sheds fewer internet subscribers than expected while beating on earnings
- AT&T earnings pressure stock, but company wins cheers for ‘financial progress’
Breaking down streaming packages
The evolution of the streaming landscape — including the deal through which Warner Bros. Discovery Inc.
WBD
was formed in April when AT&T Inc.
T
decided to part with the TV and movie content-creation assets it had paid dearly for — has complicated streaming package deals for consumers.
Zoe Han explains how the relationships between wireless service providers, equipment makers (including Apple Inc.
AAPL
) and various streaming companies work, to help users understand how to get the most for their money.
Should you buy or rent your home?
Here is some food for thought if you, a family member or a friend are deciding whether to buy a home or to rent one. The customary argument in favor of buying a home is that if you borrow money to do so, you build equity over time as the loan is paid down. But life is never simple, and there are many variables to consider.
Aarthi Swaminathan shared results of a report and a survey that shed more light on the subject. The annual report from Joint Center for Housing Studies at Harvard University showed that in 2022 the number of renters in the U.S. spending more than 30% of their gross incomes on rent and utilities had hit a record high.
Think about that figure — some people consider housing to be affordable if it costs less than 30% of your gross income. But if you are in an area with a high income-tax rate, and then factor in federal income taxes, Social Security, Medicare and other deductions from your salary (including health-insurance premiums), that 30% of your gross income may wind up to be more than half your net income.
Getting back to the question of whether or not to buy a house, more than half of the people who participated in a survey by NerdWallet agreed that owning a home was no longer a marker of success. MarketWatch readers added their own comments, and many of those highlighted aspects of homeownership, and the timing of it, that may be overlooked when people decide whether or not to buy. You can join the conversation.
If you are married, you need to understand this IRA inheritance rule
If you are married and are the beneficiary of your spouse’s individual retirement account, you have more choices in what to do with that money if your spouse dies than a nonspouse beneficiary would have. And the tax consequences of the wrong decision can be enormous. Beth Pinsker explains the IRA inheritance rules for spouses — every couple with retirement accounts should learn them.
More on IRAs from Beth Pinsker: I’m 73 and starting RMDs with a $53,000 withdrawal. When will I have to pay income tax on this?
Fun with elections
Investors may be best served by toning down any bitterness over this year’s presidential election. No matter which of the (likely) candidates you support, this week’s ETF Wrap should be of interest. Isabel Wang outlines which sectors and which exchange-traded funds might be helped or hindered if Donald Trump were to be elected to serve another term.
Stock picks in an unloved sector
Here’s a look at how the 11 sectors of the S&P 500
have performed, sorted by total returns (with dividends reinvested) so far this year, with the full index at the bottom:
| Sector or Index | 2024 return | 2023 return | 2022 return | Return since end of 2021 | Forward P/E | P/E to 5-year avg. | P/E to 10-year av. |
| Communication Services | 8.7% | 56% | -40% | 2% | 18.2 | 95% | 96% |
| Information Technology | 7.1% | 58% | -28% | 21% | 28.1 | 122% | 146% |
| Financials | 2.4% | 12% | -11% | 3% | 14.7 | 99% | 103% |
| Healthcare | 1.6% | 2% | -2% | 2% | 18.4 | 112% | 113% |
| Consumer Staples | 0.6% | 1% | -1% | 0% | 19.1 | 97% | 100% |
| Energy | -0.1% | -1% | 66% | 63% | 11.4 | 102% | 60% |
| Industrials | -0.3% | 18% | -5% | 11% | 19.6 | 94% | 106% |
| Consumer Discretionary | -3.4% | 42% | -37% | -13% | 24.9 | 82% | 98% |
| Real Estate | -3.5% | 12% | -26% | -20% | 17.1 | 88% | 92% |
| Materials | -3.6% | 13% | -12% | -5% | 18.4 | 108% | 113% |
| Utilities | -3.7% | -7% | 2% | -9% | 15.0 | 83% | 87% |
| S&P 500 | 2.7% | 26% | -18% | 6% | 19.9 | 103% | 111% |
| Source: FactSet | |||||||
To incorporate the seesaw pattern of a broad decline for stocks in 2022 followed by a recovery in 2023, the table includes returns from the end of 2021. The energy sector has been the best performer for that period. But the table also includes current forward price-to-earnings ratios and shows their levels relative to five- and 10-year averages.
All of that underscores investors’ lingering distrust of the energy sector. Not only is it the cheapest of the S&P sectors on a forward P/E basis, but its current P/E valuation is far lower relative to its 10-year average than any other sector.
Michael Brush makes the case for investors to gravitate toward energy stocks and highlights 10 ways to add exposure to the sector.
More from Michael Brush: Five real risks that could crush stocks in 2024 — and why they won’t
And more on stocks: Here’s a new way to consider value for stocks in the S&P 500
AI, semiconductors and investors
Nvidia Corp.
NVDA
is not the only story when it comes to the rollout of artificial intelligence technology. Here’s a roundup of this week’s events and opinion:
Do you still expect a recession?
Economics has long been called “the dismal science,” but these days pessimists are singing a happier tune. Hannah Erin Lang explains why economists are changing their minds about the prospects of a U.S. recession.
Any economy can be difficult: This is why I’m not paying my student loans
The Moneyist answers the questions you and I would love to avoid tackling
When readers pose difficult questions to Quentin Fottrell — the Moneyist — they typically involve family conflicts over money and property. But sometimes even the neighbors can be involved.
Read on, as the Moneyist gets involved:
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