Tesla First-Quarter Deliveries Fall Short; Trump Tariffs in Focus

This week is shaping up to be one of the most eventful weeks of the entire year.President Trump is set to reveal his set of “reciprocal” tariffs on Wednesday after the closing bell. We likely won’t see the full extent of any market reaction until Thursday and Friday.Trump’s “Liberation Day” will target other countries’ duties and trade barriers on U.S. goods. A one-month suspension of the 25% tariffs on Mexican and Canadian goods is also set to expire in early April.Markets have mainly held steady this week, grinding slightly higher in the days leading up to Trump’s announcement. Trade-war worries remain front and center, with the latest headlines pointing to the possibility of a “blanket” 20% tariff on our trading partners.It’s another potential move in a long list of back-and-forth events that are frustrating both domestic and foreign companies alike. The uncertainty surrounding the tariff narrative is something companies have had to deal with for several months, but hopefully some level of clarity is on the horizon.The Fed is also on hold for the time being and would like to see what, if any, inflationary impact that tariffs will have before cutting rates further. We’ve heard from Fed Governor Christopher Waller throughout the year, who has repeatedly stated that he’s unlikely to support a rate cut at the Fed’s May policy meeting.“I want to see what happens with the inflation data. I want to see a little bit more with what happens with tariff policies,” Waller said at a Wall Street Journal event.The comments reinforce the Fed’s data-dependent stance. But there’s always a chance they act more quickly if, for example, we begin to see further cracks in the labor market. We’ll get the March jobs numbers on Friday morning.  When markets are very volatile, it’s simply not a time to get aggressive. If you’ve been keeping track of the markets lately, it’s clear that there’s a high level of choppiness, making it difficult for both bears and bulls alike.One stock that has been feeling the pain this year is EV giant Tesla TSLA. The company missed first-quarter delivery estimates this morning, adding to its recent woes.Tesla Falls Short of Q1 Delivery ProjectionsTesla reported first-quarter deliveries on Wednesday of 336,000, the lowest quarterly performance in more than two years as the company deals with public backlash to CEO Elon Musk’s involvement with the Trump administration.First-quarter delivery expectations had fallen steadily over the course of the past few months from an average of 470,000 to (timelier) estimates of about 370,000. Today’s figure represented a 13% decline from a year ago.In the first quarter of 2024, Tesla delivered about 387,000 vehicles, which was also a big miss versus the 425,000 median projection from analysts at the time.During the most recent quarter, Tesla dealt with partial shutdowns in several of its factories. These planned pauses enabled the company to upgrade its manufacturing lines to begin production of a revamped version of the popular Model Y SUV.And Tesla recently rolled out the refreshed version of its best-selling vehicle. New model updates typically spark a fresh burst of sales with hungry buyers keenly awaiting the new features and updated look. Tesla began delivering the redesigned Model Y in late February in China, and just last month in the U.S. and Europe.Still, the recent delivery numbers are cause for concern. Analysts had already begun revising their Q1 earnings estimates lower. First-quarter EPS estimates have dropped 18.03% in the past 60 days. The Zacks Consensus Estimate now stands at $0.50 per share on revenues of $22.5 billion. These numbers are likely to fall further in the coming days, with Tesla slated to report Q1 results later this month.Image Source: Zacks Investment ResearchTSLA stock is currently a Zacks Rank #3 (Hold). The company missed on earnings estimates in three of the past four quarters, with an average earnings surprise of 0.79% during that timeframe. Tesla is part of the Zacks Automotive – Domestic industry group, which ranks in the bottom 31% out of approximately 250 Zacks Ranked Industries.Tesla Stock PerformanceTesla stock shot up after President Trump’s victory, soaring about 90% in the month after the election.But the gains proved to be short-lived. Heading into Wednesday’s trading, Tesla stock had shed about 34% this year. Shares have erased all of their post-election gain and are now off roughly 45% from their mid-December record high.Image Source: StockChartsTesla stock dropped 2% on Wednesday morning amid broad market weakness and light Q1 delivery figures. Shares remain below a downward-sloping 50-day moving average and have been testing their 200-day moving average in recent days.Tesla is set to unveil its self-driving robotaxi service in Austin in just a couple of months, which could provide a much-needed boost to the stock.Final ThoughtsDespite the bullish start to the week for the general market, risk remains elevated in the current environment as we’re seeing this morning. Volume on most rally attempts (like yesterday) has been below average, signaling a lack of true conviction behind these upward moves. We’re not yet seeing broad-based traction, which suggests that caution is still warranted.It’s never easy in the stock market, but we can choose to avoid certain behaviors that make our lives more difficult. Buying heavily in volatile markets is something that we should avoid as risk levels are high. It’s a much better idea to allow trends to stabilize and let the picture become clearer.Make sure to stay abreast of leading industry groups and sectors. Be prepared for more volatility surrounding the tariff announcements. Keep your watchlists ready, as there are some individual names working well this year.5 Stocks Set to DoubleEach was handpicked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2024. While not all picks can be winners, previous recommendations have soared +143.0%, +175.9%, +498.3% and +673.0%.Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.Today, See These 5 Potential Home Runs >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Tesla, Inc. (TSLA): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks