$350 or $150 First?
Tesla (TSLA) shares are trading at around $250 per right now. It’ll be one of the most watched stocks in 2024 – because it always is.
After recalling over 120,000 vehicles for a door-safety issue (it can be fixed with software, though, so no in-person visit necessary – which is a story for another time), the company announced a revamped popular Model Y starting production in Shanghai in 2024.
Big Tesla bull and Wedbush analyst, Dan Ives, is calling for shares at $350 and a $1 trillion valuation in 2024. They could reach that… but it’ll be a fluke.
I’m calling for shares to $150 first. For two reasons.
One, the base price for a Model 3 is over $50,000. We talked last week about declining purchasing power because of higher loan costs and persistent inflation for consumers like us. People can’t afford them… and there’s no place to charge them if they can.
Two, opening production in a country hungry for EVs is great… but there’s also NIO (NIO), the $17 billion Shanghai EV giant. Plus, we need to consider the systemic issues with the Chinese economy right now.
Biotech's Buying Bonanza
Just like we spoke about a few weeks ago with AbbVie, biotechs are on a streak right now.
And it seems like they’re forecasting what they believe the Fed will do regarding rates in 2024. When you believe debt will become “less” expensive, you start buying with… debt.
That’s just the case now with Bristol-Myers Squibb (BMY)’s announced purchase of RayzeBio (RYZB) (oncology specialist) for $4.1 billion.
Bristol will pay $62.50 per share under the terms of the deal, which was a premium of 104% over RYZB prices as of the end of last week. Arbitrage? If you want.
But this acquisition spree is gaining steam, so we’ll take a look at biotech within the next few weeks. Until then, my favorite name in the space is Ozempic producer, Novo Nordisk (NVO).
The $1 Billion “I’m Sorry”
After cutting full-year revenue estimates a few days before Christmas and now forecasting a decline, Fedex (FDX)’s 10% earnings plunge is now followed with an “I’m sorry.”
That’s essentially what they’re doing by announcing a $1 billion accelerated share buyback program, to be executed no later than February 29.
This marks 1.6% of their total market capitalization… and the company was up yesterday and is up premarket now.
Is $1 billion enough of an apology?
Just like CJ was talking about a few weeks ago, it could be. We may have seen a bottom in consumer sentiment and demand over the past two quarters, which would work in Fedex’s long-term favor.