Tesla, IBM, United Rentals: Trending Tickers
Tesla (TSLA) closes 12% lower on Thursday after missing on fourth-quarter earnings estimates and warning of lower production growth in 2024.
IBM (IBM) shares surge on the company's revenue beat and booming AI demand.
Lastly, United Rentals (URI) tops fourth-quarter earnings and releases positive 2024 guidance.
For more expert insight and the latest market action, click here to watch this full episode of Yahoo Finance Live.
Editor's note: This article was written by Luke Carberry Mogan.
Video Transcript
- --Tesla, stick there, those shares driven into the red as the EV maker warns production growth will be notably lower than 2023 while downward pressure continues on margins since Tesla began its cost-cutting efforts late in 2022. So we know we broke this one earnings on air, Julie. Stock dropped immediately, and it has stayed down.
There are some big issues here for investors to think about in 2024. We know, broadly, EV demand is slowing, certainly here in North America. We've talked about that. We know Tesla has been cutting prices.
That's been the strategy, Elon Musk playing kind of the volume game here. Does that continue? And competition-- with Musk even talking about competition, specifically from those Chinese names.
- So Tesla down the most in a single session in a year. It's also the worst reaction we have seen to earnings, I believe, going back to its second quarter of 2019 report, which it reported, obviously, about three months later in mid-2019. Something else that's interesting here is because of the market share wipeout that we've seen for Tesla, it is now smaller than Eli Lilly. Of course, Eli Lilly has also gained because of GLP-1, its obesity drug.
So that's sort of the magnitude of the drop that we are seeing today. But it's on top of a big drop that we've already seen in Tesla shares this year. So is this a sort of a bigger turning point for Tesla? Is this just sort of a rocky patch? I was reading a little bit today about questions over why Tesla prioritized production of the Cybertruck over the mass market vehicle that the market really seems to want and that they're not gonna get until 2025 at the earliest.
So, you know, is this sort of a more fundamental breaking, if you will, if I'm gonna use an auto analogy?
- I see where you're going there.
- Or is it just something more short-term? I think we'll have to see.
- Dan Ives, by the way, over at Wedbush--
- Yeah.
- Dan Ives-- title of the note to his clients this morning-- "We Wrongly Expected Adults in the Room on the Call"-- maintains they outperform, price target 315--
- Yep.
- --but Dan Ives coming in hot.
- Yeah, definitely disappointed here, if he's disappointed. All right. Let's talk about IBM, too. Those shares popped after the company beat estimates on the top and bottom line, reported a better than expected revenue, and, importantly, free cash flow outlook-- the stock climbing to a more than 10-year high in today's trading.
That is really significant because as we discussed yesterday, the stock had been sort of stuck in a sideways trading range for, really, the better part of a decade and then broke out over the past year, so now getting to that level, the highest level in about a decade, and a big gain in the wake of those earnings as well.
- Yeah, here's the note that I like from Evercore. And, of course, that was the team that said, listen, we think-- heading into the print, they said, we think this story is underappreciated as a way to play AI, which got some attention. They call out that note to their clients. They say, big blue is back.
That's their-- right? The clients, they say, stick with the outperform. Their target they take to 215. They think the print, the guide, especially that free cash flow guide, we got positive for the story here.
- Yeah. Let's talk United Rentals as well. Sorry--
- Why are you hopping in there?
- That's true. Sorry, sorry.
- I was so excited to talk about the name. I know. I get it. I get it. It's exciting-- shares surging after surpassing Wall Street estimates for the fourth quarter, company also delivering a better than expected outlook for 2024.
So this is the equipment rental giant. Looks like adjusted EPS beats, Julie. Revenue jumped, it looks like, 13% to 3.73 billion. That's also a beat versus consensus and tends to boost the buyback and the dividend-- so some capital return there, news as well.
- Yeah, United Rentals is an interesting one as well, not just because of what it said but also because of what it indicates, right? So this is sort of-- could you call it an economic bellwether to some degree here? The company says that they are seeing strength here related to some of its longer-term contracts here, rental revenue up by 14%, contractor supply sales up 13% as well. So that was quite interesting here that the company, you know, seeing strong demand in some markets.
- Yeah, we should-- the forecast here looking ahead, looks like they're calling for 2024 revenue, their range, 14.65 to 14-- I'm sorry, 14.65 to 15.1 billion. The upper end of that range does beat consensus. So that also explains the move we saw today.
