Last year, the Australian stock exchange lost one of its copper miners when OZ Minerals was taken over by BHP Group Ltd (ASX: BHP) for $9.6 billion.

This left investors with slim pickings when it comes to direct exposure to the base metal.

But fear not, a blockbuster ASX IPO is on the horizon that promises to give investors access to a high-quality copper operation.

Upcoming ASX IPO

The company in question is Metals Acquisition, which is due to hit the ASX boards later this month under the ticker code MAC.

In connection with the listing, the company is seeking to raise A$300 million (US$197 million) before costs through the issue of between 17,647,059 – 18,750,000 CDIs in the range of A$16.00 to A$17.00 each.

What is Metals Acquisition?

Metals Acquisition is an NYSE-listed copper miner that owns the CSA Mine at Cobar in regional New South Wales.

At 1.9 kilometres deep, it is one of Australia’s deepest underground mines. The mine, which was previously owned by Glencore PLC (LON: GLEN), is also one of Australia’s highest grade copper mines, producing approximately 40,000 tonnes of copper each year.

The company is currently listed on the New York Stock Exchange, which means that this ASX IPO will be for a secondary listing.

As of yesterday’s close, its NYSE listed shares were trading close to a 52-week high at US$12.84. This equates to A$19.76 in Australian dollar, which appears to indicate that its indicative ASX IPO price is at an attractive discount for local investors.

Metals Acquisition shares are scheduled to commence trading on the ASX on 20 February if all goes to plan.

The post ASX IPO alert: Blockbuster copper listing coming soon appeared first on The Motley Fool Australia.

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More reading

• Chair says his $2.8 billion Domino’s stock meltdown ‘doesn’t matter’
• Why is the Cochlear share price tumbling 5% on Tuesday?
• Down 70%: An insider just loaded up on this ASX 300 lithium share
• Guess which ASX 200 mining stock is sinking on strike fears
• 7 must-see results this ASX reporting season before buying or selling

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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Domino’s Pizza Enterprises Ltd (ASX: DMP) stock has been through a terrible plunge, it is currently 30% lower than its level on 15 January 2024.

The sell-off was sparked by a trading update. You can read the coverage of that from my colleague James Mickleboro here.

While the company saw good sales growth in ANZ and Germany, it suffered from negative same-store sales performance in Japan, Taiwan, Malaysia and France.

In the FY24 first half, Domino’s is expecting to report net profit before tax (NPBT) of between $87 million to $90 million, which is lower than what it generated in the FY23 first half, and above the FY23 second half.

Management said improvements are required in the FY24 second half to grow order volumes and it withdrew its guidance and commentary about its FY24 performance.

Is this a big worry for Domino’s stock?

The market usually judges a profitable business on how much profit it’s making and the direction of the profit. Clearly, investors were not impressed.

But, one of the leadership figures of Domino’s – chair Jack Cowin – is not concerned by the fall of around 75% of the Domino’s share price since 2021 which has seen his current shareholding fall in value by roughly $2.8 billion – it’s now ‘only’ worth around $950 million.

The Australian Financial Review reported that Cowin said:

If you’re not buying or selling it doesn’t matter. The last couple of years the ball hasn’t bounced the right way.

The board is supportive of the direction the company is taking. The company is supportive of Don.

Cowin noted pain in Malaysia for American-related fast food brands because of a boycott relating to the Gaza war, with Malaysia reportedly supporting Palestine.

The Domino’s chair said the company is working on reinventing overseas markets where a disappointing performance could eventually be turned around.

What now?

It could take Domino’s stock a bit of time to regain investor confidence – this is not the first time that the Domino’s share price has sold off.

If the business can regain momentum in some of these underperforming markets, particularly Japan and France, then it could send the profit and perhaps the share price back in the right direction.

The estimates on Commsec currently suggest the business could achieve a similar earnings per share (EPS) and pay a similar dividend in FY24 as FY23. EPS could be $1.44 and the dividend per share could be $1.10, which would put the business at 29 times FY24’s estimated earnings and a dividend yield of 2.7%, excluding any possible franking credits.

The post Chair says his $2.8 billion Domino’s stock meltdown ‘doesn’t matter’ appeared first on The Motley Fool Australia.

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• These ASX 200 shares could rise 30% to 50%
• As the Domino’s share price continues to struggle, is it a no-brainer buy?
• Top ASX shares to buy in February 2024
• Is the Domino’s share price a buy after its plunge?
• Why Bapcor, Domino’s, Santana Minerals, and Woodside shares are charging higher

Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Domino’s Pizza Enterprises. The Motley Fool Australia has recommended Domino’s Pizza Enterprises. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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It’s been a pretty awful day for the S&P/ASX 200 Index (ASX: JXO) and most ASX 200 shares so far this Tuesday. At present, the ASX 200 has slid by 0.52% and is back to around 7,585 points. But it’s been far worse for the Cochlear Limited (ASX: COH) share price.

Cochlear shares are having a horrid day. This ASX 200 healthcare stock and medical device manufacturer closed at $308.45 a share yesterday. But this morning, Cochlear shares opened at $301.74 and are currently down a significant 5.55% to just $291.33 a share.

So what’s going on with Cochlear shares this Tuesday that has elicited such a dramatic, and market-trailing, loss for investors?

Why has this ASX 200 healthcare stock just tanked 5%?

Well, unfortunately, we can’t know for sure. There has been no news or announcements out of Cochlear itself today that might explain this sizeable share price drop. Indeed, we haven’t seen any fresh news out of the company since 12 January.

However, there has been some other news out today that might be playing a role here.

According to reporting in The Australian, an ASX broker has dramatically downgraded its opinions on Cochlear shares.

As reported, broker UBS has lowered its rating on Cochlear from neutral to sell. The broker has also reduced its share price target for the company by 7.7% to $240 a share. If realised, this would see the Cochlear share price lose another 17.7% from where the company is currently trading at.

Here’s what UBS analyst Laura Sutcliffe was quoted as saying to explain this move:

The market seems to be ignoring the possible impact to Cochlear’s implant sales from a potential vaccine against CMV [cytomegalovirus], a virus transmitted in utero that accounts for an estimated 20 per cent of childhood deafness… Our work with experts suggests a good chance of success, meaning 5-6 per cent of our prior Cochlear revenue estimates could be at risk.

This could well be what has spooked investors today. A long-term threat to Cochlear’s business model is obviously not something that shareholders relish. Even if this vaccine news leads to better outcomes for humanity, investors have to value Cochlear’s financials above everything else.

Cochlear share price snapshot

Despite today’s chunky sell-off, the Chochlear share price has remained a fairly lucrative investment for anyone who has held the company for longer than a few months. At today’s pricing, Cochlear remains up a healthy 32.3% over the past 12 months, and up 46.5% over the past five years.

At the current share price, Cochlear is trading with a market capitalisation of $19.96 billion and a dividend yield of 1.13%.

The post Why is the Cochlear share price tumbling 5% on Tuesday? appeared first on The Motley Fool Australia.

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• The ASX 200 is close to all-time highs, should I sell my shares?
• These 3 ASX 200 shares just got some big broker upgrades!
• 5 things to watch on the ASX 200 on Tuesday
• History shows 2024 could be a big year for ASX 200 shares. Here are 3 to look at now
• Here are the top 10 ASX 200 shares today

Motley Fool contributor Sebastian Bowen has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Cochlear. The Motley Fool Australia has recommended Cochlear. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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Vulcan Energy Resources Ltd (ASX: VUL) shares have managed to avoid another lithium selloff on Tuesday.

In afternoon trade, the ASX 300 lithium share is up 1% to $2.03.

As a comparison, Arcadium Lithium (ASX: LTM) shares are down 5%, Pilbara Minerals Ltd (ASX: PLS) shares are down 2%, and Core Lithium Ltd (ASX: CXO) shares are down 3%.

Why is this ASX 300 share rising?

Investors appear to have been buying the Germany-based lithium developer’s shares today in response to news of some insider buying.

Insider buying is often seen as a bullish indicator as few should know the intrinsic value of a company than its directors.

According to the change of director’s interest notice, the company’s non-executive director Josephine Bush has added to her holding.

The notice reveals that Ms Bush picked up 14,200 Vulcan shares through an on-market trade on Monday. This boosted the non-executive director’s holding by 54% to 40,367 units.

In addition, it was revealed that Ms Bush paid a slightly higher price that where the ASX 300 share trade today. She paid an average of $2.045 per Vulcan share, which equates to a total consideration of $29,039.

Is this good news?

While this isn’t the largest insider buying you will see, it is still likely to be interpreted as a positive by the market.

And there haven’t been many of them in recent times.

Due largely to the falling lithium price, this ASX 300 share is down by a whopping 71% over the last 12 months.

Investors appear concerned what prices the company’s Zero Carbon Lithium project will be dealing with when it finally commences operations in 2025.

Though, with its costs estimated by management to be “one of the lowest on the industry cost curve and despite inflation,” it may be better placed than most.

The post Down 70%: An insider just loaded up on this ASX 300 lithium share appeared first on The Motley Fool Australia.

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• 7 must-see results this ASX reporting season before buying or selling
• Will you have enough in superannuation when you retire?
• Which major ASX mining share will pay the biggest dividend this year?
• Why Inghams, Janison, Myer, and Nick Scali shares are rising today

Motley Fool contributor James Mickleboro has positions in Arcadium Lithium. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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Champion Iron Ltd (ASX: CIA) shares are having a tough time on Tuesday.

In afternoon trade, the ASX 200 mining stock is down 6% to $6.22.

Why is this ASX 200 mining stock sinking?

While the mining sector is admittedly struggling today, there’s more to this decline than just that.

This morning, the Canadian iron ore miner revealed that unionised employees have voted against the company’s proposed terms towards a new collective bargaining agreement (CBA).

Instead, they have voted in favour of a strike action mandate. This mandate means that these workers can initiate a strike if the ongoing discussions do not conclude in a new agreement.

And given that unionised employees represent 63% of its workforce at the Bloom Lake mine, this could have a major impact on its production during the quarter.

The ASX 200 mining stock advised that it believes it has proposed fair and equitable terms for a new CBA. It highlights that its offer carefully balances the needs of its employees to protect their individual buying power, considering inflationary pressures, and reflects industry competitive dynamics.

Clearly the unionised employees don’t agree with this. And it’s not like Champion Iron is struggling for cash right now.

Last week, the ASX 200 mining stock reported third quarter revenue of C$507 million and EBITDA of C$247 million. The latter was up 109% year on year.

One positive, though, is that the company advised that it has significant liquidity and stockpiled iron ore concentrate. As a result, it believes it is well positioned to mitigate the impacts of a potential strike on its operations and financial position.

Champion Iron’s CEO, David Cataford, commented:

We are disappointed that we could not reach an agreement with the union following recent discussions and a mediation process. We always have the well-being of our employees at heart, whether unionized or not. As such, we aim to create the best possible work conditions to retain, attract and develop the best talent, while ensuring our Company can navigate volatile economic environments.

Our latest global offer submitted to the Metallos [union] meets this objective in every aspect. We have shown a great deal of transparency with the Metallos since the beginning of negotiations and we are confident that its members recognize our significant efforts in offering a healthy work environment and competitive terms towards a new CBA.

The post Guess which ASX 200 mining stock is sinking on strike fears appeared first on The Motley Fool Australia.

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• Here are the top 10 ASX 200 shares today

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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We’re (somehow) now in early February of 2024. That means that ASX reporting season is upon us. Every six months, most ASX shares show investors their report card for (usually) the preceding six-month period. This means that over the rest of this month, and into next, we’ll get a look at how the six months to 31 December 2023 treated the companies on the ASX.

Reporting season is one of the biggest ASX events of the year. It usually sets the trend for most stocks’ share prices over the following months and can make or break a company’s share price fortunes.

So it goes without saying that most investors will be paying attention to what their companies have to say over the coming weeks.

But today, I want to discuss seven ASX shares that I’ll personally be watching this reporting season. I think their results will be must-sees this month and will dictate the mood of the markets over the coming six months.

7 ASX 200 shares I’m watching this reporting season

First up is the big one, Commonwealth Bank of Australia (ASX: CBA). As the largest ASX 200 bank stock on the market, CBA often leads the ASX pack during reporting season, announcing its results relatively early. As one of the largest companies on the market, as well as one of the most widely-held stocks in Australia, CBA’s earnings often set the mood for the entire season.

If CBA bears good news, ideally a dividend hike, it can indicate a humming Australian economy, which is obviously good news for all ASX shares. CBA’s results also give us a good indication of what might come out of the other ASX 200 banks.

CBA is actually the only member of the big four that conforms to the normal ASX reporting season schedule. But I’ll also be watching out for the trading updates that we’ll likely see from the other banks like Westpac Banking Corp (ASX: WBC).

Next, I’ll be watching the big mining stocks‘ reports, particularly that of BHP Group Ltd (ASX: BHP). Behind the banks, the big miners like BHP are responsible for a vast chunk of the dividends available to investors on our share market. The miners are also good harbingers of the health of both the global and Australian economies – not to mention the Federal Government’s budget.

So again, if we see good earnings and generous dividends from the likes of BHP, it’s going to help set the tone of the entire market.

It’s a similar story with Woodside Energy Group Ltd (ASX: WDS). BHP might be the largest miner on the ASX, but Woodside is the largest ASX 200 energy stock. It’s another strong source of dividend income, and its earnings should give some additional insight into the global and local economies.

Barometers of inflation and the economy

Next, I’ll be paying attention to what both Woolworths Group Ltd (ASX: WOW) and Coles Group Ltd (ASX: COL) have to say this ASX reporting season.

As the largest grocers and consumer staples providers in the country, both Coles and Woolies can offer some unique insights into economic factors like inflation. These companies’ results can tell us a great deal about whether Australians are absorbing cost of living pressures or whether they are hitting hard. I’ll be watching Coles’ and Woolies’ earnings and dividends with great interest this month.

My final stock on the ASX reporting season watchlist is Telstra Group Ltd (ASX: TLS). Telstra delighted investors with another dividend hike last year. As one of the most widely-held dividend payers on the ASX (including by yours truly), Telstra’s dividend decisions every reporting season are closely watched.

If the company delivers another dividend hike later this month, it will go a long way in setting the tone for the ASX’s 2024 in my view.

The post 7 must-see results this ASX reporting season before buying or selling appeared first on The Motley Fool Australia.

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• What history says on avoiding CBA shares because they’re ‘expensive’
• Morgans names the best ASX 200 stocks to buy in February

Motley Fool contributor Sebastian Bowen has positions in Telstra Group. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has positions in and has recommended Coles Group and Telstra Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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Superannuation is an extremely useful tool to help people save for retirement. More than half of Aussies are reportedly worried about not having enough money to retire.

The increased cost of living doesn’t make it any easier for Aussies to save for retirement or to live within their retirement budget. But, that doesn’t mean we can’t reach our golden years in a really good financial place.

Superannuation is great for retirement savings because contributions and earnings are taxed at a cheaper tax rate than what a full-time worker would see if they invested in their own name.

Everyone’s finances are different, with varying spending intentions. So, let’s look at what the official guidance is for what’s required to retire comfortably.

How much is needed to retire?

Based on the AFSA retirement standard, a retired couple aged between 65 and 84 currently needs a budget of $71,700 for a comfortable lifestyle and $46,600 for a modest lifestyle. A single retiree currently needs $51,000 per year for a comfortable lifestyle and $32,400 for a modest lifestyle.

The above budgets assume that the retirees own their home outright and are “relatively healthy”. So, retirees still paying for a roof over their heads may need more cash flow.

In terms of a superannuation balance to fund those spending targets, the AFSA has suggested that for a comfortable retirement, a couple would need $690,000 and a single retiree would need $595,000.

For a ‘modest’ retirement, the AFSA suggests $100,000 for both a couple and a single retiree.

Those balances reflect an assumed investment earning rate of 6%. Receiving the age pension is why the same savings is required for both couples and singles. Those superannuation balances take into account receiving the age pension immediately and in the future, which is adjusted regularly by an increase in CPI or wage growth, whichever is higher.

However, there are a lot of people who don’t have these superannuation balances needed for a comfortable retirement.

Of course, it’s worth noting that households may have cash flow or assets beyond the pension of their superannuation. There could be assets outside of superannuation such as ASX shares or savings accounts/term deposits in their own name. Being able to downsize the home and unlock some equity could also boost the investable amount.  

A qualified financial planner may be able to help figure out the best moves retirees can make (or for people planning for retirement).

Helpful ways to boost retirement cash flow

One of the best things to consider could be part-time work to boost money coming in through the door, assuming it doesn’t affect anything like someone receiving the pension. Receiving $5,000 a year for part-time work could be the same as having an extra $100,000 in superannuation.

Higher interest rates are helping retirees who have sizeable cash sums. Instead of earning almost nothing, cash is currently paying solid yields.

ASX dividend shares offering a good dividend yield could help reduce the superannuation balance required to generate a good amount of investment income. For example, a $300,000 balance produces $12,000 of passive income with a 4% yield and it makes $18,000 with a 6% yield.

Investing in ASX dividend shares is how I’m planning to build my retirement nest egg to ensure I’m getting enough income.

The post Will you have enough in superannuation when you retire? appeared first on The Motley Fool Australia.

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• Which major ASX mining share will pay the biggest dividend this year?
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Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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ASX mining shares are among the biggest dividend payers in the market.

Income investors love ’em.

The big Australian mining companies are well-established, mature businesses that churn out great profits year after year. That’s why they are seen as reliable dividend payers.

But things really get exciting when commodity prices are elevated, because that can substantially bump up the passive income for investors.

The crucial commodity is iron ore.

The iron ore price has traded in a volatile but upward trajectory since May 2023. In that time, it has ripped from about US$98 per tonne in May to more than US$130 per tonne today.

We’ll see the benefits of that material commodity price lift in the major miners’ reports this earnings season.

When will the big three miners report their earnings?

The three biggest ASX mining shares on the market today are BHP Group Ltd (ASX: BHP), Rio Tinto Limited (ASX: RIO), and Fortescue Ltd (ASX: FMG).

BHP is due to report its 1H FY24 results on 20 February.

Rio Tinto will release its FY23 full-year results on 21 February.

Fortescue will inform the market of its half-year results on 22 February.

And all three will announce their next dividend payments alongside their results.

So, which major ASX mining share will pay the most in 2024?

Let’s take a look at the current forecasts from the experts.

Which major ASX mining share will pay more?

In 2023, BHP shares paid $2.6143 in annual dividends, fully franked.

The consensus forecast published on CommSec today is for BHP shares to pay an annual dividend of $2.399 in 2024. Based on the current BHP share price of $45.82, this equates to a dividend yield of 5.24%.

In 2023, Rio Tinto shares paid $5.8738 in annual dividends, fully franked.

The consensus forecast is for Rio Tinto shares to pay an annual dividend of $7.689 in 2024. Based on the current Rio Tinto share price of $128.25, this equates to a yield of 6%.

In 2023, Fortescue shares paid $1.75 in annual dividends, plus full franking credits.

The consensus forecast is for Fortescue shares to pay an annual dividend of $2.132 in 2024. Based on the current Fortescue share price of $28.18, this would be a yield of 7.57%.

So, there you have it.

In yield terms, Fortescue shares will pay more than BHP and Rio Tinto in 2024.

In dollar terms, Rio Tinto shares will pay more.

The post Which major ASX mining share will pay the biggest dividend this year? appeared first on The Motley Fool Australia.

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Motley Fool contributor Bronwyn Allen has positions in BHP Group. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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The S&P/ASX 200 Index (ASX: XJO) is having another tough session. In afternoon trade, the benchmark index is down 0.6% to 7,577.6 points.

Four ASX shares that are not letting that hold them back are listed below. Here’s why they are rising:

Inghams Group Ltd (ASX: ING)

The Inghams share price is up 4% to $4.49. This appears to have been driven by a broker note out of Bell Potter this morning. According to the note, the broker has upgraded this poultry producer’s shares to a buy rating with a $4.90 price target. It said: “Feed cost deflation looks likely to become a tailwind in FY25e based on recent crop price movements and improved 2023-24 winter cropping prospects.”

Janison Education Group Ltd (ASX: JAN)

The Janison share price is up 48% to 38.5 cents. Investors have been buying this education technology company’s shares after it announced an agreement with the New South Wales Department of Education and Cambridge University Press & Assessment. Management expects the agreement to generate revenue of up to $45 million over the initial five-year term.

Myer Holdings Ltd (ASX: MYR)

The Myer share price is up 13.5% to 75.5 cents. This has been driven by the release of a trading update from the department store operator. Myer advised that total sales for the first half of FY 2024 are expected to be down 3% on the prior corresponding period to $1,829.1 million. In addition, net profit after tax is expected to be $49 million to $53 million. While this will be down from $65 million, it appears to be better than feared.

Nick Scali Limited (ASX: NCK)

The Nick Scali share price is up almost 18% to $14.13. This follows the release of the furniture retailer’s half year results. Nick Scali reported a 20% decline in revenue to $226.6 million and a 29% reduction in net profit after tax to $43 million. The latter was ahead of its guidance.

The post Why Inghams, Janison, Myer, and Nick Scali shares are rising today appeared first on The Motley Fool Australia.

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More reading

• Why is the Janison Education share price rocketing 42% on Tuesday?
• Nick Scali share price rockets 19% on guidance beat
• These 3 ASX 200 shares just got some big broker upgrades!
• Why is the Myer share price jumping 13% today?
• Buying ASX retail shares? You’ll want to see these numbers

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Janison Education Group. The Motley Fool Australia has recommended Janison Education Group and Nick Scali. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

from The Motley Fool Australia https://ift.tt/fT7QRDw

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

January was a great month for most stocks, but not so much for Tesla (NASDAQ: TSLA). The leading electric vehicle (EV) manufacturer’s stock fell by 24.6% in January and continues to fall in February, according to data from S&P Global Market Intelligence. Shares are currently off 55.5% from all-time highs set in 2021.

Here’s why investors are souring on Tesla’s prospects in 2024.

Contracting margins, low growth warning

In its Q4 earnings, Tesla reported another quarter of unit volume growth, with total car deliveries to customers up 20% year over year compared to 2022. However, due to its aggressive price cuts to prop up demand, Tesla’s revenue only grew 3% year over year in Q4 2023. But honestly, that’s one of the best numbers from the report.

Gross profit fell 23% in Q4 due to lower selling prices that Tesla had to implement in order to get inventory out the door, while operating income declined a staggering 47% year over year. Investors are likely worried about these contracting profit margins and what it means to Tesla’s earnings power over the next few years.

Despite these low selling prices, CEO Elon Musk guided for lower unit volume growth in 2024. Slowing growth and lower prices is a tough pill for most investors to swallow, and indicates the Tesla brand is not resonating with consumers as it once did. Either that or the EV market is much smaller than investors expected a few years back.

The stock is still pricey

Even though Tesla stock has fallen 55% from highs and a staggering 25% in one month, shares still look expensive. Its trailing price-to-earnings ratio (P/E) is 41.1, which is much higher than the S&P 500 average of 27. Tesla’s operating earnings have gone in the wrong direction for multiple quarters and now sit at $8.9 billion over the last 12 months.

With average selling prices falling and growth expected to be meager in 2024, Tesla will likely see earnings decline once again in 2024. That would make its forward P/E a lot higher than 41.1, which is already above the market average. A high earnings multiple and falling earnings is a recipe for poor stock returns.

There is a lot of hype around Tesla stock and its eccentric CEO Elon Musk. Many investors claim to buy the stock because of the clean energy revolution, robotics, or even artificial intelligence (AI) breakthroughs. But at the end of the day, a stock will move up or down based on its earnings power. Tesla’s earnings power is moving in the wrong direction. 

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

The post Why Tesla stock tanked in January appeared first on The Motley Fool Australia.

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More reading

• Stock-split watch: Is Tesla next?
• Tesla stock has tanked 27% in 2024: Is it time to buy the dip?
• Tesla share price screeches 6% lower as vehicle growth hits speed bump
• Automation era: Why I’m buying more Tesla shares despite margin decline

Brett Schafer has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Tesla. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

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