Tesla Struggles as a Blue-Chip Stock in 2024

Published 2 days agoTSLA

Tesla Struggles as a Blue-Chip Stock in 2024

Tesla, Inc. has emerged as one of the least impressive blue-chip stocks this year, with its stock price declining about 9.5% in 2024. In stark contrast, the S&P 500 has seen a significant upswing, climbing approximately 24%, Insider Monkey reported, reflecting Tesla’s underperformance compared to the broader market.

Several factors contribute to this downturn. Tesla’s price-to-earnings ratio stands at a striking 162.2, a stark difference from the sector median of 15.5, signaling potential overvaluation concerns as noted by Nasdaq. Additionally, quality issues have surfaced, with Tesla vehicles ranking last in quality assessments according to ValueWalk, reporting 250 problems per 100 vehicles against an industry average of 166.

In response to these challenges, analysts have adjusted their expectations for Tesla. Wells Fargo and UBS have both downgraded their price targets, reflecting anticipated declines as Tesla faces stiffening competition in the electric vehicle market. Insider Monkey also pointed out a decline in Tesla’s market share by 3.3 percentage points this year, indicating a shift in the competitive EV landscape.

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