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Business Insider
an hour ago
- Automotive
- Business Insider
Wall Street is eyeing more challenges for Tesla heading into its 2nd-quarter earnings report
Tesla will report second-quarter results on Wednesday, and Wall Street is cautious after what's been a wild first half of the year for Elon Musk's carmaker. Analysts remain generally bullish on the stock's long-term outlook but are eyeing challenges ahead, particularly regarding Musk's political ambitions and sagging demand for Teslas in recent months. Wall Street expects Tesla to report $22.7 billion in revenue for the quarter, down around 11% from the same period last year. Earnings per share are expected to come in at $0.33, down 36% from EPS in the second-quarter of 2024. The stock has been on a roller coaster ride this year amid concerns about tariffs, Musk's political activities, and his public feuding with President Donald Trump. The stock is down 18% year-to-date. The latest earnings will also offer critical updates to hot topics on investors' radar, including the closely watched robotaxi business. Here's what Wall Street forecasters are saying ahead of Tesla's earnings report. Morgan Stanley: Musk's politics still a headwind Musk creating a new political party could become a short-term headwind on Tesla stock, analysts at Morgan Stanley wrote in a note, calling the situation a "party crasher." The bank pointed to the immediate drop in Tesla stock after Musk officially announced his plan to form the " America Party" in a post on X, which sent shares tumbling around 7%. "While the situation remains fluid, we believe investors should be prepared for further devotion of resources (financial, time/attention) in the direction of Mr. Musk's political priorities which may add further near-term pressure to TSLA shares," analysts wrote. Tesla's deliveries are also likely to "remain subdued" through the rest of the year, the analysts added, forecasting a 13% decline in the second-half. That's slightly less than the 14% year-over-year drop in deliveries Tesla saw in the second quarter. Still, Tesla stock remains a "top pick" for the bank. Analysts reiterated their $410 price target on the stock, pointing to their growth forecasts for Tesla's auto business. The price target implies 23% upside from current levels. Bank of America: Q2 earnings are challenged Tesla is in a difficult spot ahead of earnings, Federico Merendi, an analyst at Bank of America, wrote on Monday. "Tesla 2Q earnings are likely to be challenged due to tariffs and disappointing deliveries," Merendi wrote, adding that Tesla sourced its batteries from China and that its exposure to tariffs was "not insignificant." On the positive side, Merendi pointed to Tesla rolling out its Robotaxi service in Austin last month, as well as the possibility that demand for the company's vehicles will improve in the third quarter, as consumers could "pull" their demand forward before the EV tax credit gets phased out later this year. The bank reiterated its "Neutral" rating on the stock and raised its price target to $341 a share, up from the prior estimate of $305. Its new price target implies about 3% upside from the current levels. Wedbush Securities: Stock could be at a "positive crossroads" Tesla stock could be heading toward an inflection point, if Musk continues to lead Tesla and stay on top of its most important projects, analysts at Wedbush Securities said. In a note on Tuesday, the firm said that the outlook for Tesla looked "dramatically different" today compared to three months ago, when Musk was still working closely with the Trump administration. Since then, Musk's time as a special government employee has come to an end, and the CEO now looks "laser focused" on Tesla's ongoing projects, they said, pointing to the Robotaxi launch and Tesla possibly investing in xAI, the artificial intelligence startup Musk founded in 2023. "If Musk continues to lead and remain in the driver's seat this pace, we believe Tesla is on a path to an accelerated growth path over the coming years," the firm said, adding that they believed AI could generate around $1 trillion in value for Tesla alone. In a previous note, Wedbush analysts expressed concerns over Musk's political intentions, calling his plan to create a new political party a "Soap Opera" that needed to end. The firm also outlined a list of actions Tesla's board needed to take to move the company forward, which included drafting a new pay package for Musk and setting guidelines for Musk's political plans. "We are at a 'positive crossroads' in the Tesla story," the analysts added. "While near-term and this quarter the numbers are nothing to write home about, we believe investors are instead focused on the AI future at Tesla with a motivated Musk back driving Tesla's future." Wedbush reiterated its "Outperform" rating and the stock and $500 price target, implying about 52% upside from the stock's current levels. William Blair: Eyeing headwinds from Trump's Big Beautiful Bill Tesla could see further downside, partly thanks to policy changes in the Republican tax and spending bill, analysts from William Blair wrote in a note earlier this month. The firm pointed to the bill's ending of the EV tax credit, as well as the removal of corporate average fuel economy fines — fines for carmakers when their vehicles aren't energy efficient enough. Both changes are expected to impact Tesla's revenue, given that the company sold emissions credits to other carmakers that didn't meet energy efficiency standards. "While the $7,500 tax credit is likely to affect demand, the combination of a demand headwind and over $2 billion in profit from regulatory credits at risk may be too much for investors to bear," Jed Dorsheimer and Mark Shooter, two analysts at the firm, wrote. Musk's political plans could also remain an overhang on Tesla stock, Dorsheimer and Shooter added, pointing to Musk's new party. "We expect that investors are growing tired of the distraction at a point when the business needs Musk's attention the most and only see downside from his dip back into politics. We would prefer this effort to be channeled towards the robotaxi rollout at this critical juncture." The firm downgraded Tesla to a rating of "Market Perform." Cantor Fitzgerald: Handful of risks ahead Analysts at Cantor Fitzgerald lowered their second-quarter revenue forecast for Tesla to $21 billion, down from their prior estimate of $24.1 billion. The revision reflects the year-over-year decline in Tesla deliveries in the second quarter, analysts said, though they noted that they weren't changing their year-end revenue and earnings target for the stock. Cantor also outlined a handful of potential catalysts and key risks to the stock ahead: Analysts added that they saw particularly long-term upside from Tesla's Robotaxi business. "Overall, we continue see Tesla's Robotaxi segment as a software-as-a-service, high-margin model, and we expect TSLA to have the ability to rapidly scale following commercialization. We continue to believe that TSLA will capture significant share of the autonomous driving and ride-sharing industries," they added. The firm reiterated its "Overweight" rating and $355 price target on the stock, implying 8% upside from the stock's current level.
IOL News
5 hours ago
- Business
- IOL News
SA fund managers shift focus to local equities while wary of economic challenges
South African fund managers are making significant moves on local equities, favouring banks and retailers over traditional defensive stocks. Image: Supplied Tawanda Karombo South African fund managers emerged this month as overweight on local equities, with banks and apparel retailers the most preferred stocks while real estate, healthcare, and telecoms topped the rankings among the disliked ones. Despite the wider preference for local equities, the South African fund managers are worried about subdued corporate earnings per share, noted Bank of America (BofA) Research in its July SA Fund Manager Survey released on Monday. The survey revealed a net 53% of managers overweight on equities and 20% underweight on cash, showing that 'they want to buy' equities. 'Preferred sectors are banks, apparel retail, software and diversified industrials. Disliked: real estate, healthcare, telecoms… food producers, tobacco and life insurance (defensives) gain ground,' said the report. Video Player is loading. Play Video Play Unmute Current Time 0:00 / Duration -:- Loaded : 0% Stream Type LIVE Seek to live, currently behind live LIVE Remaining Time - 0:00 This is a modal window. Beginning of dialog window. Escape will cancel and close the window. Text Color White Black Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Background Color Black White Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Transparent Window Color Black White Red Green Blue Yellow Magenta Cyan Transparency Transparent Semi-Transparent Opaque Font Size 50% 75% 100% 125% 150% 175% 200% 300% 400% Text Edge Style None Raised Depressed Uniform Dropshadow Font Family Proportional Sans-Serif Monospace Sans-Serif Proportional Serif Monospace Serif Casual Script Small Caps Reset restore all settings to the default values Done Close Modal Dialog End of dialog window. Advertisement Next Stay Close ✕ Ad loading Nonetheless, for the second month, the fund managers exhibited a preference over the rand hedges amid concerns over 'policy shifts to the left' and 'a weaker earnings backdrop'. There was an overall high positioning relative to history in equities, gold, life insurance, bonds and platinum. This comes against the backdrop of a resurgence in the price of platinum group metals and gold prices remaining elevated on global markets. The SA fund managers this month had a low positioning in healthcare, telecom, cash and offshore. According to the survey, the biggest gains in positioning were in 'life insurance, equities and personal goods' while food producers were also among the biggest fallers, alongside software and general. In the 12 month outlook, 33% of surveyed fund managers see the South African equity market as undervalued, with a slightly higher net at 67% seeing more 'Buy' than 'Sell' opportunities. In terms of current and future asset allocation, 73% prefer positioning in financials and industrials in the domestic equity portion of the portfolio. 'Managers added to industrial equities and sold bonds. They added to offshore equity and bonds. Offshore investments well off regulatory 45% limit at 35% (32%) but near highs,' noted the survey. Regarding the economy, the 3% inflation target gained more weight among SA fund managers this month, with a net 33% expecting the South African economy 'to get a little stronger' and 33% expecting inflation slightly higher. The rand/USD exchange rate is seen averaging R1:$17.26 and 67% see a rate cut. The fund managers positioning on South African bonds had fewer of them overweight, showing that fewer managers want to buy bonds again. 'Managers' repo forecast over the next 12 months is 6.81%. The R2035 bond yield forecast falls to 9.50% (and) the 12-month rand forecast firms. Economic optimism slightly more positive. We need reform and growth, to put South African citizens first, and a weaker dollar (outside a global recession),' noted BofA report. Last month, the SA Fund Manager Survey exhibited investors becoming overweight on platinum. This represented one of the biggest shifts as the fund managers positioning on platinum shifted from underweight to overweight. This high positioning for platinum was at the time 'relative to history in software, gold, retail and food producers and bonds. It also came despite the World Platinum Investment Council saying full year output will still be 6% lower than last year 'since South African producers will not benefit from the large drawdown of work-in-process inventory that occurred' last year. Besides the inclination towards platinum, the South African fund managers have exhibited 'low positioning' in healthcare, offshore, telecom and cash. BUSINESS REPORT
Yahoo
9 hours ago
- Business
- Yahoo
HELOC rates today, July 22, 2025: The home equity line of credit rate hangs steady
The HELOC interest rate is parked and idling. As home equity line of credit interest rates refuse to move, homeowners can shop for introductory rate offers. You can lock in a lower rate for six months to a year, and then your HELOC will convert to a variable rate. With good credit and sufficient equity in your home (around 20% or more), the best HELOC lenders will compete for your business. Now, let's check today's HELOC rate. Dig deeper: HELOC vs. home equity loan: Tapping your equity without refinancing This embedded content is not available in your region. HELOC rates Tuesday, July 22, 2025 According to Bank of America, the largest HELOC lender in the country, today's average APR on a 10-year draw HELOC is 8.72%. That is a variable rate that kicks in after a six-month introductory APR, which is 6.49% in most parts of the country. Homeowners have a staggering amount of value tied up in their houses — more than $34 trillion at the end of 2024, according to the Federal Reserve. That's the third-largest amount of home equity on record. With mortgage rates lingering in the high 6% range, homeowners are not likely to let go of their primary mortgage anytime soon, so selling the house may not be an option. Why let go of your 5%, 4% — or even 3% mortgage? Accessing some of the value locked into your house with a use-it-as-you-need-it HELOC can be an excellent alternative. How lenders determine HELOC interest rates HELOC interest rates are different from primary mortgage rates. Second mortgage rates are based on an index rate plus a margin. That index is often the prime rate, which today is 7.50%. If a lender added 1% as a margin, the HELOC would have a rate of 8.50%. Lenders have flexibility with pricing on a second mortgage product, such as a HELOC or home equity loan, so it pays to shop. Your rate will depend on your credit score, the amount of debt you carry, and the amount of your credit line compared to the value of your home. And average national HELOC rates can include "introductory" rates that may only last for six months or one year. After that, your interest rate will become adjustable, likely beginning at a substantially higher rate. How a HELOC works You don't have to give up your low-rate mortgage to access the equity in your home. Keep your primary mortgage and consider a second mortgage, such as a home equity line of credit. The best HELOC lenders offer low fees, a fixed-rate option, and generous credit lines. A HELOC allows you to easily use your home equity in any way and in any amount you choose, up to your credit line limit. Pull some out; pay it back. Repeat. Meanwhile, you're paying down your low-interest-rate primary mortgage like the wealth-building machine you are. This embedded content is not available in your region. Look for introductory rates, but be aware of a rate adjustment later Today, FourLeaf Credit Union is offering a HELOC rate of 6.49% for 12 months on lines up to $500,000. That's an introductory rate that will convert to a variable rate later. When shopping lenders, be aware of both rates. And as always, compare fees, repayment terms, and the minimum draw amount. The draw is the amount of money a lender requires you to initially take from your equity. The power of a HELOC is tapping only what you need and leaving some of your line of credit available for future needs. You don't pay interest on what you don't borrow. HELOC rates today: FAQs What is a good interest rate on a HELOC right now? Rates vary so much from one lender to the next that it's hard to pin down a magic number. You may see rates from nearly 7% to as much as 18%. It really depends on your creditworthiness and how diligent a shopper you are. Is it a good idea to get a HELOC right now? For homeowners with low primary mortgage rates and a chunk of equity in their house, it's probably one of the best times to get a HELOC. You don't give up that great mortgage rate, and you can use the cash drawn from your equity for things like home improvements, repairs, and upgrades. Of course, you can use a HELOC for fun things too, like a vacation — if you have the discipline to pay it off promptly. A vacation is likely not worth taking on long-term debt. What is the monthly payment on a $50,000 home equity line of credit? If you take out the full $50,000 from a line of credit on a $400,000 home, your payment may be around $395 per month with a variable interest rate beginning at 8.75%. That's for a HELOC with a 10-year draw period and a 20-year repayment period. That sounds good, but remember, it winds up being a 30-year loan. HELOCs are best if you borrow and pay back the balance in a much shorter period of time.
Zawya
14 hours ago
- Business
- Zawya
JPMorgan considers offering loans backed by clients' cryptocurrency holdings, FT reports
JPMorgan Chase is exploring plans to offer loans backed by clients' cryptocurrency holdings, including bitcoin and ethereum, as early as next year, the Financial Times reported on Tuesday, citing people familiar with the matter. The move comes as other major U.S. banks, including Bank of America and Citibank, are developing stablecoins amid a broader push for more crypto-friendly regulation in Washington. CEO Jamie Dimon, a longtime bitcoin skeptic, recently said that the bank will be involved in stablecoins. JPMorgan declined to comment to the FT. The bank did not immediately respond to a Reuters' request for comment outside regular business hours. In May, Dimon told investors that he is "not a fan" of the bitcoin universe citing concerns, including leverage, misuse, and money laundering issues in the system, ruling out getting into custody - storing crypto assets for clients - or expanding significantly even if regulations ease. "We're going to allow you to buy it, we're not going to custody it," he said, likening the approach to permitting behavior he personally disagrees with. (Reporting by Bipasha Dey in Bengaluru; Editing by Mrigank Dhaniwala and Nivedita Bhattacharjee)
Globe and Mail
14 hours ago
- Automotive
- Globe and Mail
Tesla Inc: Analysts Update Target Forecasts
Tesla Inc. (TSLA) (TSLA:CA) Bank of America (BofA) has increased its 12-month price target on Tesla Inc. from $305 to $341, reflecting a more optimistic outlook for the electric vehicle maker's potential. Despite the raised target, BofA has maintained its 'Neutral' rating, signaling that while the bank acknowledges improving fundamentals or external conditions (such as macro trends, cost efficiencies, or AI/data center tailwinds), it believes the stock is fairly valued at current levels. The 'Neutral' stance suggests a balanced view of upside and downside risks amid ongoing concerns like increased competition, regulatory uncertainty, and potential volatility around deliveries and margins. Cantor Fitzgerald has reiterated its 'Overweight' rating on Tesla and maintained its 12 month price target of $355 per share, indicating continued confidence in Tesla's growth trajectory and long-term value. The Overweight rating implies that Cantor expects Tesla to outperform the broader market and sector average. Cantor likely sees strength in Tesla's expanding product pipeline, leadership in EV technology, and potential upside from its AI and robotics ventures—such as Full Self-Driving (FSD) and Optimus—justifying a higher valuation multiple. Stock Forecast & Analysis Tesla's consensus analyst rating is a 'Hold', reflecting a mixed sentiment on the stock. The average 12-month price target for Tesla stands at approximately $300 per share, suggesting the stock is currently trading over over its perceived valuation models. The consensus target reflects analyst expectations factoring in the company's fundamentals, competitive environment, and broader macroeconomic conditions. Key contributors to this Hold consensus include: Concerns over valuation: Tesla trades at a premium relative to traditional automakers, and many analysts believe the stock price already reflects aggressive growth assumptions. Competition and market saturation: Analysts are watching how Tesla will fare as legacy automakers and new EV startups increase competition, especially in core markets like the U.S., China, and Europe. Margin pressures: Ongoing price cuts, high R&D spending on AI and robotics, and ramp-up costs for new models or facilities could weigh on margins, limiting near-term earnings growth. Catalysts for future upside: Some analysts remain optimistic about long-term catalysts including Tesla's progress in Full Self-Driving (FSD) technology, expansion into energy storage, potential monetization of AI-related assets, and new vehicle platforms.
