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stock was down Tuesday after shares closed below an important level of support on Monday. The recent action leaves investors wondering where shares are headed as the company’s first-quarter earnings report approaches.
Tesla dropped 5.6% Monday, losing almost $10 and closing at $161.48 following news that Tesla would lay off more than 10% of its 140,000-strong workforce. The
and
fell 1.2% and 1.8%, respectively.
Shares were down 2.4% at $154.56 at 1 p.m. Tuesday, while the S&P 500 was little changed and the Nasdaq was up 0.1%. Tesla stock hadn’t traded below $160 since May 2023.
The declines leave Tesla stock down about 37% year to date. Shares are now trading for about 44 times the per-share earnings the EV maker is expected to produce in 2025. They started the year trading for about 65 times, according to FactSet.
The drop Monday took Tesla below a so-called technical support level at about $164 a share. Breaking through a support level—a price where investors have been willing to buy in the past—leaves investors looking for the next level where declines might stop. Fairlead Strategies co-founder Katie Stockton said $148 represents another level of support.
Stockton and other technical analysts don’t make fundamental calls on stocks. They look at price charts to suss out where shares can go over the short and medium term. Technical analysts such as Stockton use moving averages, percentages of prior gains, and other data to figure out what’s coming next for a particular stock.
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Shares might drift toward the $148 level without something significant to change investor sentiment. Earnings are a factor that could change the picture, for better or for worse.
Tesla is due to report first-quarter results on April 23 after the market closes. It likely would take reassurance from CEO Elon Musk that growth will return to send the stock higher.
Tesla delivered about 387,000 vehicles in the first quarter of 2024, down almost 9% year over year, missing the lowest Wall Street estimates by roughly 20,000 units. The miss led Wall Street analysts to cut 2024 delivery estimates to about 1.8 million units, flat with 2023.
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“I’d love [Musk] to give a candle of hope…a ray of light for [profit margins],” says Canaccord analyst George Gianarikas.
Lower deliveries and falling EV prices have pressured profit margins. Wall Street expects operating profit margins in the first quarter to come in at about 6%, according to FactSet, down from 11% in the first quarter of 2023 and from 19% in the first quarter of 2022.
“People need hope,” added Gianarikas. He rates Tesla stock at Buy with a $234 price target.
Write to Al Root at allen.root@dowjones.com
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