Elon Musk, CEO of Tesla and SpaceX, poses on the red carpet. (Photo by TOBIAS SCHWARZ/AFP via Getty Images)
AFP via Getty ImagesTesla bears are capitulating—finally.
The stock caught upgrades from two bearish analysts over the past 24 hours.
First, Morgan Stanley Adam Jonas upgraded shares to the equivalent of Hold from Sell, while raising his target price for shares to $1,360 from $1,050.
Then Bank of America analyst John Murphy raised his rating to Hold from Sell. Murphy more than doubled his price target, which went to $1,750 from $800.
The upgrades come a little late. Tesla stock has more than doubled over the past three months, and have gained 287% in 2020. It’s gained another 3% to $1,670 Friday morning.
Murphy points out that a rising stock price makes it easier to raise money, while Jonas believes Tesla’s battery technology is more valuable than he previously thought.
Tesla bulls might rejoice at the conversion of two bears, but 13 out of 36 analysts continue to rate the stock the equivalent of Sell. Only six analysts rate Tesla shares Buy. Only six have been right so far.
Valuation has been the biggest point of contention. Tesla is worth $800,000 per car delivered, more than 100 times the valuation of Ford and General Motors.
Just remember: Expensive stocks are often controversial, but they’re often expensive for a reason.
—Al Root
***
Fortnite Kicked Off Apple, Google App Stores
Epic Games is coming for Apple and Alphabet. The publisher filed lawsuits after its Fortnite game was pulled from both companies’ app marketplaces.
- A longtime critic of fees for in-app purchases, Epic added a payment option in the Fortnite app that circumvents Apple’s fees, which is against the platform’s rules. Fortnite was pulled from the App Store late Thursday afternoon.
- Fortnite was later removed from the Google Play platform. But unlike on Apple devices, Epic can allow users to download the game on their Android phones outside of the platform.
- “Epic enabled a feature in its app which was not reviewed or approved by Apple, and they did so with the express intent of violating the App Store guidelines regarding in-app payments that apply to every developer who sells digital goods or services,” Apple said in a statement.
- In an in-game event, Epic premiered a short film that parodied Apple’s original “1984” Macintosh commercial that portrayed itself as revolutionary against International Business Machines.
- Epic also filed an antitrust lawsuit against Apple and Google. “Apple has become what it once railed against: the behemoth seeking to control markets, block competition, and stifle innovation,” Epic wrote in the suit.
What’s Next: Apple’s App Store has been the subject of antitrust scrutiny in recent years. Last month, CEO Tim Cook was grilled by U.S. legislators on the issue. In June, the European Union opened antitrust investigations into Apple’s App Store and Apple Pay practices.
—Connor Smith
***
Trump Opposes New U.S. Postal Service Funding
President Donald Trump said his efforts to block new funding for the U.S. Postal Service in coronavirus-aid talks, if successful, would also hamper mail-in balloting, sparking charges from Democrats that Trump was trying to undercut voters for political gain, according to The Wall Street Journal.
- Trump said demands from Democrats for post office funding amid the pandemic is holding up a potential stimulus deal.
- The president has criticized mail-in voting in recent months. Critics have argued there is no evidence of widespread voter fraud. Amid the pandemic, more Americans will likely rely on USPS to cast their votes.
- “They want $25 billion,” Trump said on Fox Business. “Billion. For the Post Office. Now, they need that money in order to have the Post Office work so it can take all of these millions and millions of ballots. Now, in the meantime, they aren’t getting there. By the way, those are just two items, but if you don’t get those two items, that means, you can’t have universal mail-in voting, because they’re not equipped to have it.”
- House Speaker Nancy Pelosi of California responded on MSNBC, clarifying that $25 billion was recommended by the Board of Governors of the USPS. During its fiscal third quarter, the USPS reported a $2.2 billion loss.
What’s Next: Congressional Democrats are demanding Postmaster General Louis DeJoy—a Republican donor who started in June—undo recent operational changes at the USPS they argued will worsen the crisis facing the service ahead of the 2020 election.
—Connor Smith
***
Why the Market Yawned at Falling Jobless Claims
The number of Americans who filed for initial jobless benefits dropped below 1 million for the first time since March, data released by the Labor Department Thursday showed.
- Although the 963,000 workers who filed were fewer than expected, equity markets ended the day mixed.
- Thursday’s relatively good news is still terrible. Even at the peak of the 2008-09 financial crisis, new claims topped out at 665,000 a week, about 30% less than the current rate.
- Some 28 million Americans continue to receive some form of unemployment, including the 10.7 million gig workers and others receiving pandemic unemployment assistance.
What’s Next: The lower numbers could make a stimulus deal more difficult to reach, since those opposed to extending enhanced unemployment benefits may see the lower numbers as confirmation that the extra benefits aren’t needed. The Senate, which had put off starting its summer recess, is now officially adjourned until after Labor Day.
—Ben Walsh
***
Schools Revise Their Reopening Plans as Fall Draws Near
American efforts to return to in-person schooling continue to face setbacks.
- In New York City, the only major urban district currently planning in-classroom instruction, Mayor Bill de Blasio said there will now be a registered nurse in every school. Unions have asked to postpone the first day of school so more planning can be done.
- A number of New Jersey school districts have opted to go fully-remote a day after the governor allowed individual school systems that option.
- Some parents and students in Florida say they aren’t sure what the plan is in their districts. While the state has mandated in-person classes five days a week, some school boards are trying to negotiate exemptions and get special plans approved.
What’s Next: Currently, about half of all U.S. students will learn remotely and that number is likely to grow.
—Ben Walsh
***
U.S. Coronavirus Death Toll May Be Much Higher Than Reported
More than 200,000 Americans have likely died from Covid-19, far more than the official number of deaths reported by the Centers for Disease Control and Prevention, a New York Times analysis of that data found.
- From mid-March to Aug. 1, there were 211,500 “excess deaths,” or deaths above normal levels, indicating that about 56,000 more Americans died from the coronavirus than the CDC reported for that same period.
- The location of excess deaths in the U.S. closely tracked with the time and location of coronavirus hot spots, starting with a spike in the Northeast in April and May that has now receded, followed by a large increase in the South in July.
- New York City’s spike in excess deaths this spring was less than but comparable to the worst of the 1918 Spanish flu, according to a research letter in JAMA Network Open. Back then, 31,589 of the city’s 5.5 million residents died versus 33,465 of its current 8.28 million residents.
What’s Next: Tracking excess deaths could provide a more comprehensive account of the Covid-19 death toll. The spike of excess deaths across the country is likely to continue as the daily number of new Covid-19 cases, a leading indicator of eventual fatalities, remains extremely high.
—Ben Walsh
***
UK Quarantines French Arrivals Amid Rising Worries in Europe
The British government Thursday added France and five others to the list of countries whose travelers must quarantine for two weeks when entering the UK, starting Saturday. The French government said it would reciprocate, just as it put the city of Paris on “red alert” due to rising coronavirus infections.
- UK transport minister Grant Shapps said about 160,000 British travelers in France would be affected by the measure. The French and UK stock markets fell more than 2% in early trading on worries about further restrictions, with shares of low-cost airlines easyJet and Ryanair down 7% and 5%, respectively.
- The French government put the district of Marseille, the country’s second-largest city, as well as Paris on red alert which signals “active circulation of the virus.” The level of new infection in the country is now at its highest since the end of restrictions in May.
- The UK government also reopened theaters, and said wedding receptions and spectator sports would now be allowed. It also reinforced the penalties for violating safety regulations, notably with fines of up to £3,200 (about $4,200) for failure to wear a face mask where required.
What’s Next: The UK has now quarantined all its closest neighbors as infections are rising throughout the continent. This will be another impediment to trade, and another hit to the European economy. But governments will face a much bigger economic shock if they fail to curb the new spread of the virus.
—Pierre Briançon
***
Do you remember this week’s news? Take our quiz below and tell us how you did by emailing thebarronsdaily@barrons.com.
1. China flew jet fighters near Taiwan an hour before the most senior U.S. official to visit Taiwan in four decades met with Taiwan’s president. Who was the official?
a. Secretary of Commerce Wilbur L. Ross, Jr.
b. Secretary of State Mike Pompeo
c. Secretary of Health and Human Services Alex Azar
d. Secretary of Defense Mark Esper
2. Which company announced a 5-for-1 stock split on Tuesday following the surge of its stock price in recent months?
a. Alphabet
b. Berkshire Hathaway
c. Apple
d. Tesla
3. Which two athletic conferences voted on Tuesday to push college football and other fall sports to the spring, due to Covid-19?
a. Southeastern Conference
b. Big Ten Conference
c. Atlantic Coast Conference
d. Pac-12 Conference
4. Which country registered the world’s first Covid-19 vaccine, which was only tested on about 76 people?
a. China
b. Germany
c. South Korea
d. Russia
5. A California judge said which companies’ workers should be classified as gig workers entitled to certain rights, such as paid sick leave, rather than as independent contractors?
a. Alphabet
b. Lyft
c. Amazon.com
d. Uber
Answers:1(c); 2(d); 3(b and d); 4(d); 5(b and d)
—Bonnie Bennett Slater
***
—Newsletter edited by Anita Hamilton, Mary Romano, Matt Bemer, Benjamin Levisohn
August 14, 2020 at 06:58PM
https://www.barrons.com/articles/why-tesla-stock-is-hard-to-hate-51597404231
Tesla Stock Is Getting Upgraded. Should You Buy? Why It’s So Hard to Hate. - Barron's
https://news.google.com/search?q=hard&hl=en-US&gl=US&ceid=US:en
No comments:
Post a Comment