The 2024 Q3 earnings season has gained momentum, with various companies already revealing their quarterly results. Despite recent downward revisions, the period appears promising, with expected positive earnings growth contrasting recent trends.
Tesla Struggles With Profitability
For Tesla, a critical indicator influencing stock price swings is its EV production/delivery figures. The company recently disclosed its Q3 production and delivery numbers, reporting around 463k EVs delivered and nearly 470k produced during the period.
However, Tesla has consistently fallen short of consensus expectations in recent EV delivery results, failing to meet targets in four consecutive periods.
Margin pressures have been a significant driver of negative sentiment in recent quarters, with margins declining notably amid rising costs. This decline in margins is illustrated in the trailing twelve-month gross margin chart.
Coca-Cola’s Share Performance Surprises
Contrary to expectations, Coca-Cola has witnessed its shares closely mirroring the S&P 500 in 2024, marking a 22% increase. Notably, amidst a technology-driven market, the share performance of the consumer staples giant stands out.
The recovery of margins has been a key factor contributing to Coca-Cola’s strong share performance. After facing challenges due to high costs in 2022, the company has experienced a positive shift in margins over recent periods.
Earnings and revenue revisions for the impending quarter remain steady, with Coca-Cola anticipated to report flat earnings growth alongside a 3% decline in sales. Positive remarks on profitability and reaffirmed 2024 guidance could bolster the stock post-earnings.
The stock’s valuation appears reasonable, trading at a forward 12-month earnings multiple almost in line with historical averages.
Earnings season unveils the hidden dynamics behind companies, providing an exciting time for investors. In the upcoming week, all eyes are on Tesla and Coca-Cola, set to reveal their quarterly performances.
Conclusion
As investors eagerly await the upcoming quarterly releases, both Tesla (TSLA) and Coca-Cola (KO) have significant implications for the market. Their performances will shed light on critical aspects of the EV and consumer staples industries.