Yahoo Finance Trending tickers: Tesla l Wise l JD Sports l Telecom Plus
A look at the stocks making headlines on Tuesday
Tesla (TSLA)
Shares in Tesla were under pressure on Monday after Elon Musk’s company received another downgrade from a major Wall Street bank.
Goldman analyst Mark Delaney downgraded the stock to 'neutral' from 'buy' late on Sunday, pushing its stock down 4.5% on Monday.
However, Delaney raised his price target on the stock to $248 from $185 while recommending investors cut back exposure to Tesla.
"While the primary reason for the change in our view is that we think the market is now giving the stock more credit for its longer-term opportunities, we are also cognisant of the difficult pricing environment for new vehicles that we think will continue to weigh on Tesla's automotive non-GAAP gross margin this year," Delaney said in a note.
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It comes after Barclays analyst Dan Levy downgraded Tesla shares to 'equal weight' from 'overweight' on 21 June, claiming the recent rally ignored near-term questions about the stock’s fundamentals.
Morgan Stanley followed suit on 22 June, downgrading Tesla’s stock - but raised the price target to $250 from $200.
Despite the fall in Tesla’s share price, the electric carmaker has been getting closer to its goal of becoming the default charging standard in the US after Rivian (RIVN) announced a deal to access Tesla’s supercharger network in the US and Canada from spring 2024.
Wise (WISE.L)
Shares in Wise climbed nearly 21% on the London Stock Exchange (LSE) on Tuesday morning after the fintech company reported a substantial increase in pre-tax profit.
In the year to March 31, 2023, Wise reported revenue of £846.1m ($1bn), up 51%, while pre-tax profit jumped 234% to £146.5m.
Meanwhile, its customer numbers increased by 34% to 10 million, supporting a 37% year-on-year rise in volumes to £104.5m.
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Moreover, the payments technology group predicted further growth in the coming financial year.
The company said: “We expect income to grow by between 28-33% in FY2024, and for income to grow by more than 20% CAGR over the medium-term.
“We continue to expect our adjusted EBITDA margin to be at or above 20% over the medium term, but for it to remain higher than our target in FY2024 due to a higher proportion of interest income flowing to adjusted EBITDA."
JD Sports (JD.L)
Shares in JD Sports were trading in the red on Tuesday after the fashion retailer shared a trading update.
The company said there had been some softening in trade in its North American business in June. However, it said this would be offset by growth in demand for its trainers and sportswear in the UK, Europe and Asia Pacific.
The board, however, maintained its view that headline profit before tax and adjusted items for the year will come in line with current expectations for £1.04bn.
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“JD Sports has sunk to the bottom of the FTSE 100 (^FTSE), with shares down by over 4%, reflecting the retailer’s disappointing performance in North America driven by a sluggish growth backdrop in the United States and less demand from consumers for discretionary goods,” Victoria Scholar, head of investment at Interactive Investor, said.
“Nonetheless shares are still up over 8% in 2023, with most of the gains skewed towards the start of the year while recent months have been more challenging since the February peak.”
Across JD Sports’ wider business, organic sales growth at constant exchange rates moderated to around 8% for May from the 15% growth it reported for the first three months of its financial year.
Telecom Plus (TEP.L)
On the FTSE 250 (^FTMC), Telecom Plus (trading as Utility Warehouse and UW) stock climbed nearly 12% putting it at the top of the index after the company reported record revenues and profits for its bundled household services products.
The company said revenues soared 155% over the 12 months up to 31 March 2023, rising from £967.4m to £2.48bn, with profits up 55% from £61.9m to £96.2m.
Telecom Plus also said it had seen a 24% increase in the number of services supplied, rising to 2.8 million from 2.3 million.
It also highlighted that adjusted earnings per share were up 57% to 99.2p, compared to 63.2p last year.
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Also cheering investors, the utility services company increased its full year dividend from 57p to 80p per share.
Looking ahead, the group said it is aiming to scale its insurance business through the establishment of an in-house broker and insurer.
Andrew Lindsay and Stuart Burnett, co-CEOs of the firm, said in a statement: “This has been an outstanding year for the company: the fundamental strengths of our business model have reasserted themselves and delivered a strong outcome for all our stakeholders — particularly for our customers who benefitted from the lowest energy prices in the country throughout the year, saving over £30m on their bills.”
AJ Bell investment director Russ Mould said perhaps the biggest question for investors to now wrestle with is over the share price, which is lurking near one-year lows, despite all of the good news.
“The yield looks attractive but using the adjusted historic earnings per share (EPS) number of 99.2p, the shares trade on 17 times historic earnings, a big premium to the wider UK equity market which trades on 13 times historic earnings and nearer 11 times forward earnings for 2023.
"The reason for the one-third share price fall from the winter peaks may be as much one of valuation as the effect of falling energy prices and government support schemes. At its highs Telecom Plus traded on multiples of earnings that represented a huge premium to the UK market and priced in an awful lot of good news. The combination of the share price drop and rapid earnings growth means the valuation premium is now lower and — perhaps in the eyes of some, judging by gains in the wake of the results — easier to justify," he said.
Watch: Do Tesla downgrades matter?
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