Here are the big stories driving auto stocks today:
Tesla shares double from lows
Around a month ago Tesla (TSLA) shares were in free fall and investors were wondering if the situation could get any worse.
Fast forward about a month, and now Tesla stock has doubled from its early January multi-year lows, hitting $209 in early trading on Thursday.
The main catalyst was Tesla’s earnings report a couple weeks back where Tesla reported a revenue and profit beat, as well news that the Cybertruck is set to begin production later this year.
Even more encouraging was the ensuing earnings conference call, at which CEO Elon Musk noted that demand was outstripping supply following the company’s big price cuts in early January. “Thus far in January we have seen the strongest orders year to date ever in our history,” Musk said.
That sent shares soaring the next day, and the steady climb hasn’t stopped. Add in last week’s FOMC meeting where Fed Chair Jay Powell’s use of the term “disinflation” gave tech stocks and the general market a lift on hopes of easing rates, and Tesla shares are steadily climbing past $200.
The next big catalyst for Tesla will be the automaker’s Investor Day on March, at which Musk has said he will unveil his Master Plan 3, which will detail his “path to a fully sustainable energy future for Earth.”
Toyota reports earnings and revenue beat
Toyota (TM) shares are also climbing higher today, as the world’s largest automaker reported a beat on both the top and bottom lines earlier today.
For Toyota’s fiscal Q3, the company reported revenue of $74.6 billion (9.755 trillion yen) that topped estimates, and net profit – $5.54 billion (727.94 billion yen), also topping analyst expectations.
Toyota did report that margins shrank a bit, to 9.8%, as the company said higher selling and administration costs were to blame. And the chip crisis is still impacting operations, with the company saying in a statement that it is “striving to quickly evaluate alternative semiconductors and respond to design changes for securing stable procurement of semiconductors.”
Despite this, the automaker maintained its sales forecast of 10.4 million vehicles for the fiscal year, and expects revenue to increase 15% for the year, though net profit is expected to fall 17% compared to a year ago.
Lastly, Toyota only sold 12,000 EVs globally in its fiscal Q3, a fraction of what competitors like GM, Ford, and not to mention Tesla sell every quarter. Though nearly 28% of Toyota sales are comprised of hybrids as well as EVs, the company needs to ramp up its EV efforts before it falls further behind other competitors.
This is perhaps a reason why CEO Akio Toyoda is stepping down from his position in April, to be replaced by Lexus head Koji Sato. Toyoda, whose grandfather started the automaker, will be installed as chairman of the board.