Tag Archives: tsla

Apple, Tesla Self-Driving Cars May Kill Off Consumer Auto Insurance

If Apple ( AAPL ), Tesla Motors ( TSLA ), Alphabet ‘s ( GOOGL ) Google and others succeed in making self-driving cars prevalent by 2040 and ride-hailing startups Uber and Lyft prosper, auto insurance may no longer be needed by many U.S. consumers, says S&P Global Market Intelligence. S&P released five reports this week analyzing the push into self-driving electric cars by Google, Tesla, China’s Baidu ( BIDU ) and others. While the business models of traditional automakers such as General Motors ( GM ) and Ford ( F ) will undergo big changes, the impact of self-driving cars on the $137 billion auto insurance industry and companies like Allstate ( ALL ) could be monumental, says S&P. “The advent of a totally driverless car threatens the core auto insurance liability business model,” said one S&P report. “A shift to driverless cars would theoretically shift the legal liability away from the driver, since the incidence of crashes would likely be reduced, and the liability in a crash would shift from human error to product liability, potentially reducing or removing the need for auto liability insurance.” Here are five other takeaways from S&P’s deep dive into self-driving cars and ride-sharing alliances.  Noting Apple’s $1 billion investment in China’s ride-hailing leader Didi Chuxing, which has an alliance with Lyft, S&P said ride-hailing apps may eventually summon autonomous cars. Uber, the leader in ride-sharing, is losing money, says S&P. Both Uber and Lyft face “competitive markets and issues related to how to classify their drivers and operate within federal laws and local rules.” While Apple has not officially announced plans, it seems to be gearing up in automotive technology. “Multiple hires made since the beginning of last year, including former Tesla employees, indicate an interest,” S&P said. “We also note substantial increases in R&D and capex over the past few years.” General Motors, which in early 2016 invested $500 million in Lyft, intends to integrate autonomous driving technology from Cruise Automation once it completes its planned $1 billion purchase of that company. Lyft drivers are a potential customer base for GM’s upcoming Bolt electric vehicle, says S&P. Radio service providers such as iHeart Communications, formerly Clear Channel, will likely face intensifying rivalries versus Sirius XM Radio ( SIRI ) and  Pandora Media ( P ), as well as Apple CarPlay and Google’s Android Auto. RELATED: Apple Gets Lift From China Ride-Hailing Service Investment Toyota Joins Apple, GM In Finding Ride-Hailing Partners Meet Uber’s Self-Driving Car, As Autonomous Race Heats Up .

Tesla Price Target Cut; Monsanto’s Hiked; Best Buy Downgraded

RBC Capital lowered its price target on Tesla ( TSLA ), Jefferies upped its price target on Monsanto ( MON ) on views that Germany’s Bayer will sweeten its $62 billion takeover offer, and  Best Buy ( BBY ) was downgraded by Citigroup and Deutsche Bank. Tesla RBC Capital trimmed its price target on Tesla to 242 from 252. The electric automaker last week announced a $2 billion stock offering that will be used to fund a production ramp-up for the Model 3. RBC Capital forecast a fresh $1 billion equity raise in 2017 and lowered its estimate for Model 3 shipments. “We were always below Tesla’s vehicle delivery targets of 500,000 by 2018 and 1 million by 2020, but after speaking with industry contacts and reconsidering our model, we are tempering our delivery forecast to account for a slower Model 3 ramp,” said the RBC Capital report. Tesla shares were up 0.4% in premarket trading. Monsanto Jefferies upped its price target on Monsanto to 132. “We believe a higher-than-$130-per-share transaction is highly likely, with details emerging by August,” Jefferies said in the report. Monsanto on Tuesday rejected Bayer ’s ( BAYRY ) all-cash, $122-per-share offer. “To date, activist pressure has been limited. If a deal falters, we would expect (a) step-up in pressure for Monsanto to do more with its balance sheet,” said Jefferies. Shares rallied 2.3% early. Best Buy Best Buy, which on Tuesday forecast current-quarter profit below views and said its CFO was leaving, was downgraded to neutral by Citigroup and Deutsche Bank. Citigroup cited a lack of hot new consumer electronics products. Virtual reality will not take off until 2017, said Citigroup. “Categories with no secular threats — home improvement and auto parts — are performing better and are more predictable,” Citigroup said. Best Buy shares slumped 0.8%. Fleetmatics Pacific Crest Securities upgraded Fleetmatics ( FLTX ) to overweight with a price target of 54. Shares in the mobile fleet management software provider are down 20% in 2016 after surging 43% last year. “With plenty of solid runway for growth, rising (customer turnover) now better understood, a positively received management transition and a conservative earnings outlook for the year, we turn more positive on FLTX,” said the Pacific Crest report. In other analyst moves, Needham upgraded Workday ( WDAY ) to buy and raised its price target to 85 from 80.

Tesla Short Seller Issues Scathing Warning Of Pending ‘Death Spiral’

Loading the player… Tesla Motors ( TSLA ) shares got slammed several weeks ago after analysts doubted the electric carmaker’s bullish production guidance. Now that the stock has tried to recover, bears want to take the driver’s seat again. Devonshire Research Group is shorting the stock and on Tuesday issued a report that says Tesla “has the potential to enter a death spiral” if it fails to deliver on its “bold claims on return and/or product value.” The investment firm also said Tesla “has engaged in aggressive accounting that calls to mind the experiences of Enron and WorldCom.” A Tesla spokeswoman directed IBD to the company’s latest shareholder letter, which explained that Tesla’s non-GAAP financial measures recognize revenue and related costs when customers take delivery of their cars. Other carmakers book revenue when vehicles are sold into dealership inventory rather than to end customers, it noted. BofA Sees 30% Downside And on Monday, Bank of America resumed coverage on Tesla with an underperform rating and 155 price target, which is about 30% lower than current prices. With the company’s recent equity offering, the analyst warned of further dilution to the stock, given Tesla’s cash burn rate. Tesla’s 2018 production goal was also called “optimistic at best.” Still, other Wall Street analysts have said the target is achievable and applauded Tesla for its leadership in autonomous driving technology. Global Equities Research said that suppliers are becoming more and more interested in working with Tesla, with the current supplier activity level at its Fremont, Calif., factory almost twice the level seen in December. Tesla Stock Hits Resistance Despite the negative reports, Tesla shares are holding up in the stock market today , rising 0.5%. But in Monday’s session, Tesla’s attempt to retake the key 200-day line failed as it hit resistance there. Shares are trading 24% below their high reached last July. Nvidia On Fire Meanwhile, Tesla chip supplier Nvidia ( NVDA ) is still on fire. Nvidia shares are hitting another new high Tuesday as they rise 2.2% and are extended 37% past a cup-with-handle buy point cleared in March. Mobileye Retakes 50-Day Tesla partner Mobileye ( MBLY ), which is working on autonomous driving capabilities, is trying to retake its 50-day moving average with a 1% gain. Mobileye stock is trading 42% below its all-time high reached last August. Alphabet Retakes 200-Day And Google owner Alphabet ( GOOGL ), which is also developing a self-driving car, is retaking its 200-day line as it climbs 2.2% in above-average volume. It’s still trading below its 50-day line, but a flat base with a 791.05 buy point has now taken shape.