.jpg)
1 hour ago
3
Article content
There have been no dearth of sell signals for Tesla Inc. It is facing a potential sales halt in California and an electric vehicle slowdown across the United States, and is losing market share in China and Europe.
THIS CONTENT IS RESERVED FOR SUBSCRIBERS ONLY
Subscribe now to read the latest news in your city and across Canada.
- Exclusive articles from Barbara Shecter, Joe O'Connor, Gabriel Friedman, and others.
- Daily content from Financial Times, the world's leading global business publication.
- Unlimited online access to read articles from Financial Post, National Post and 15 news sites across Canada with one account.
- National Post ePaper, an electronic replica of the print edition to view on any device, share and comment on.
- Daily puzzles, including the New York Times Crossword.
SUBSCRIBE TO UNLOCK MORE ARTICLES
Subscribe now to read the latest news in your city and across Canada.
- Exclusive articles from Barbara Shecter, Joe O'Connor, Gabriel Friedman and others.
- Daily content from Financial Times, the world's leading global business publication.
- Unlimited online access to read articles from Financial Post, National Post and 15 news sites across Canada with one account.
- National Post ePaper, an electronic replica of the print edition to view on any device, share and comment on.
- Daily puzzles, including the New York Times Crossword.
REGISTER / SIGN IN TO UNLOCK MORE ARTICLES
Create an account or sign in to continue with your reading experience.
- Access articles from across Canada with one account.
- Share your thoughts and join the conversation in the comments.
- Enjoy additional articles per month.
- Get email updates from your favourite authors.
THIS ARTICLE IS FREE TO READ REGISTER TO UNLOCK.
Create an account or sign in to continue with your reading experience.
- Access articles from across Canada with one account
- Share your thoughts and join the conversation in the comments
- Enjoy additional articles per month
- Get email updates from your favourite authors
Sign In or Create an Account
or
Article content
But all that hasn’t deterred investors excited about its work with artificial intelligence and autonomous-driving development efforts. The carmaker’s shares have rallied 25 per cent since a low on Nov. 21, notching a record for the first time this year. The stock has also outpaced the Bloomberg Magnificent Seven index, which is up less than six per cent over the same period.
Article content
Article content
Article content
The optimism centers around chief executive officer Elon Musk’s aspiration to turn Tesla into a powerhouse in robotics and AI, the booming technology that has driven global stocks to record highs. The company’s push into autonomous vehicles has drawn praise from analysts, with some saying Tesla will be a “game changer” in this field.
Article content
By signing up you consent to receive the above newsletter from Postmedia Network Inc.
Article content
“Tesla is showcasing that they are close to monetizing on AI,” said Moritz Kronenberger, a portfolio manager at Union Investment, in part pointing to the company’s ambitions to make robots and self-driving taxis. “With the newly announced narratives, it has become more and more a potential AI winner.”
Article content
Article content
Musk’s other initiatives include a potential initial public offering of rocket and satellite maker SpaceX, a business he said has been converging with Tesla. Sentiment about autonomous cars also is likely to be boosted by Waymo, Alphabet Inc.’s autonomous self-driving unit, holding discussions to raise more than US$15 billion at a valuation near US$100 billion.
Article content
“It’s clearly SpaceX. The beauty of Tesla is that retail investors amalgamate everything,” said Jacques Aurelien Marcireau, co-head of equities at Edmond de Rothschild Asset Management. “Investors tend to leverage Tesla as a proxy for the Musk Galaxy despite the very low real linkage in terms of economic interest.”
Article content
Article content
Still, Tesla faces several hurdles in its business outlook. The company’s sales in California are poised to be suspended for 30 days if it doesn’t change marketing practices that allegedly mislead consumers about its driver-assistance technology. Meanwhile, the latest quarterly results disappointed investors as rising costs undermined a record quarter for vehicle sales.
Article content
Article content
Karen Kharmandarian, senior equity investment manager at Thematics AM, said Tesla’s lofty valuations also reflect any positive news in the short term. The stock trades at 223 times forward earnings, well above a five-year average of 94, according to data compiled by Bloomberg. The broader Bloomberg Magnificent Seven index carries a price-to-earnings valuation of 31.
Article content
“I’m definitely not a buyer: the multiples are just crazy with earnings that keep on disappointing,” said Fares Hendi, portfolio manager at Societe de Gestion Prevoir.
Article content
With assistance from Farah Elbahrawy, Jordan Fitzgerald and Craig Trudell.
Article content
Article content
English (US)