Tesla's shares experienced a 2.5% increase in early trading on Wednesday, surpassing the gains of the S&P 500 and Nasdaq Composite, which rose by 0.3% and 0.4% respectively.
This marks the second consecutive day of gains for Tesla. Despite receiving a downgrade, Tesla stock rose by 2.2% on Tuesday. Jairam Nathan, an analyst at Daiwa, expressed concerns regarding Tesla's corporate governance, in addition to the challenging financial conditions it faces in 2024. Consequently, Nathan downgraded the rating from Buy to Hold and reduced the price target from $245 per share to $195.
Typically, stocks tend to decline following a downgrade. However, Tesla shares have already suffered significant losses. Year to date, the shares have declined by around 26%, underperforming the Nasdaq Composite by approximately 30 percentage points.
Ford Motor Shares Show Signs of Improvement
Investor concerns have been weighing heavily on shares in the auto industry, including Ford Motor. Falling prices and slowing electric vehicle (EV) sales growth have contributed to the decline in share prices for both Ford and other industry players. As of Wednesday, Ford's shares were down about 1% year to date.
However, Ford recently reported strong fourth-quarter earnings and provided an optimistic forecast for potential 2024 operating profits. The projected midpoint of approximately $11 billion exceeded Wall Street's expectations by $1 billion, showcasing a more positive outlook for the auto industry than anticipated. This news came as a relief to investors and provided evidence that the situation is not as dire as previously feared.
As a result, Ford stock experienced a nearly 6% increase in early trading, reaching $12.75 per share.
On the other hand, Tesla's stock continues to underperform compared to its 52-week high of $299.29, which was attained last summer. In Wednesday's premarket trading, Lucid showed a slight increase of 0.9% to $3.53, while NIO experienced a decrease of 2.3% to $5.89. Meanwhile, BYD saw a 1% increase in Hong Kong trading, and General Motors rose by 1.3% to $38.54.
Tesla's trading volume at the close of Tuesday was 122.7 million shares, which is 5.3 million shares below its 65-day average volume of 117.4 million.
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