Selected stock price target news of the day - August 14, 2023
By Matthew Otto
Tesla Sparks Competition with Strategic Price Cuts on Model Y in China
Tesla has made a move in the Chinese market by implementing price reductions on its Model Y long-range and performance versions. Effective from August 14th, the starting price of the Model Y Long Range has been lowered by 4.5% to 299,900 yuan, while the Model Y Performance now starts at 349,900 yuan, marking a 3.8% decrease. Moreover, the company has introduced insurance subsidies of 8,000 yuan for purchasers of entry-level, rear-wheel-drive versions of the Model 3 inventory vehicle from August 14th to September 30th.
The adjustments come amidst competition and evolving market dynamics, with rival brand Zeekr having recently cut prices for its Zeekr 001 crossover-sized EV. Chinese demand for electric vehicles has remained strong in 2023, with battery-electric vehicle (BEV) sales up by about 23% compared to the previous year. New energy vehicles, including BEVs and plug-in hybrids, accounted for nearly 36% of all new car sales in July, indicating a market shift towards electric mobility.
While these price cuts are anticipated to stimulate demand and drive sales growth, they also raise concerns about Tesla’s profitability. The company’s operating profit margin dropped to just under 10% in the second quarter, down from nearly 15% a year ago. Despite potential margin challenges, the company achieved a record-breaking delivery of 466,140 EVs in the second quarter, putting it on track to deliver around 1.8 million EVs in 2023. This growth has contributed to Tesla’s stock surging by approximately 97% year-to-date, outperforming the S&P 500 and Nasdaq Composite indices.
Analyst George Galliers (GOLDMAN) currently has the highest performing score on TSLA with 7/8 (87.5%) price target fulfillment ratio. His price targets carry an average of $-4.27 (-4.03%) potential downside. Tesla stock price reaches these price targets on average within 81 days.
Nikola Initiates Voluntary Recall of Electric Trucks Over Battery Fire Concerns
Last Friday evening, Nikola announced a voluntary recall involving more than 200 battery-electric heavy-duty trucks. The recall was initiated due to concerns about potential battery fires. The decision follows an investigation conducted by a third-party team, which indicated that a battery fire at Nikola’s headquarters on June 23 was likely caused by a coolant leak.
During the first half of 2023, Nikola had sold approximately 240 battery-powered trucks that were in active use within customer fleets. While the company did not immediately provide specific details about the percentage of trucks affected by the recall, they did suggest that fleet operators could continue using the trucks, provided they follow certain precautions. The trucks should be parked outdoors and equipped with the main battery disconnect switch set to the “ON” position, enabling real-time monitoring of safety systems.
Despite the recall’s impact on Nikola’s stock performance, the company has experienced growth over the past three months. Shares had surged by about 154%, largely attributed to rising orders for Nikola’s hydrogen fuel cell-powered trucks. It’s worth noting that this recall specifically pertains to battery-electric trucks, and Nikola’s plans for shipping fuel-cell trucks remain unaffected.
Analyst Michael Shlisky (D.A. DAVIDSON) currently has the highest performing score on NKLA with 2/3 (66.67%) price target fulfillment ratio. His price targets carry an average of $-0.66 (-1.28%) potential downside. Nikola stock price reaches these price targets on average within 6 days
U.S. Steel Explores Alternatives Amidst Surge in Investor Interest and Proposed Mergers
United States Steel has recently announced its exploration of strategic alternatives following the receipt of multiple unsolicited proposals. The proposals range from acquiring specific production assets to considering a complete acquisition of the company.
Among the organizations showing interest in United States Steel is Cleveland-Cliffs (CLF), which unveiled its proposal to purchase U.S. Steel for $17.50 a share and 1.023 shares of Cliffs’ stock, valuing U.S. Steel at approximately $35 a share. U.S. Steel’s board of directors rejected the proposal, citing its unreasonableness. The rejection was driven by concerns over market concentration,on the U.S. iron ore market, potentially raising regulatory issues. U.S. Steel’s decision to rebuff the proposal was accompanied by a publicized rejection letter to Cleveland Cliffs.
Despite the potential benefits of consolidation, challenges lie ahead for U.S. Steel and Cleveland-Cliffs. Both companies have faced stock declines over the past year, with U.S. Steel’s stock down around 10% and Cliffs’ stock down approximately 25%.
Analyst Gordon Johnson (GLJ) currently has the highest performing score on X with 13/16 (81.25%) price target fulfillment ratio. His price targets carry an average of $-3.02 (-12.34%) potential downside. United States Steel stock price reaches these price targets on average within 292 days