Tesla Stock Sinks to New Low as Disney Shares Scale Record Highs

Tesla got hit with a fresh batch of bear notes after earnings

Apr 25, 2019 at 2:39 PM
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The U.S. stock market is mixed today, as Wall Street weighs volatile post-earnings moves for 3M (MMM) and Facebook (FB). Among other names in focus are big-cap entertainment issue Walt Disney Co (NYSE:DIS), electric car concern Tesla Inc (NASDAQ:TSLA), and burrito chain Chipotle Mexican Grill, Inc. (NYSE:CMG). Here's a quick roundup of what's moving the shares of DIS, TSLA, and CMG.

Disney Stock Hits Record High Ahead of Avengers Premier

Disney shares hit a record high of $138.86 earlier, last seen up 2% at $137.86. The Dow stock is getting a lift on a CNBC report that suggested Comcast (CMCSA) may sell its stake in Hulu to Walt Disney, which would bring its ownership in the streaming service to 90%. Separately, buzz is building that "Avengers: Endgame" will smash box office records this weekend. The highly anticipated film already set an opening-day record in China, with an estimated $107.2 million in ticket sales, and premiers in the U.S. tomorrow, April 26.

This positive price action is more of the same for a stock that's up almost 26% year-to-date. Nevertheless, one options trader today appears to be betting on a short-term breather for DIS. Amid accelerated activity -- around 275,000 contracts have traded today, double what's typically seen at this point -- matching blocks of weekly 5/3 136-strike puts and 141-strike calls were simultaneously sold to open, signaling the initiation of a short strangle. If this is the case, the speculator expects Disney to remain between the two strikes through next Friday's close.

Tesla Stock Drops on Cash Concerns, Downgrade

Tesla stock is down 4.3% at $247.60 -- fresh off a new annual low of $246.07 -- struggling to find a foothold in the $249-$250 region, which has served as support since early 2017. Last night, the company reported a wider-than-anticipated adjusted first-quarter loss of $1.77.

Plus, in a post-earnings conference call, TSLA CEO Elon Musk said Model 3 output in its Shanghai-based Gigafactory would be between 1,000-2,000 vehicles per week, lower than a previous 3,000-vehicle per-week estimate. Musk also said "there is some merit" to raising capital, after Tesla finished the quarter with $2.2 billion in cash.

A downgrade to "neutral" from "outperform" at Wedbush is adding some heat, with the brokerage firm cutting its price target to $275 from $365, and calling Tesla's other endeavors a distraction from demand issues. Independent Research also dropped its TSLA price target, to $240 from $250, though Canaccord Genuity raised its target price to $394 from $391. The majority of analysts covering Tesla maintain a "hold" or worse rating, while the average 12-month price target is docked at $298.57.

Subpoena Buzz Overshadows Blowout Chipotle Earnings

Chipotle shares are down 4.3% at $678.99, as reports of a new subpoena as part of an ongoing investigation into a food-borne illness outbreak at one of the company's restaurants last year overshadows stronger-than-expected first-quarter earnings and revenue. Chipotle Mexican Grill also said same-store sales rose more than anticipated in the first three months of the year, and raised its full-year comparable sales forecast.

Analysts don't seem too concerned with CMG's legal woes, with no fewer than seven brokerages boosting their price targets on the stock. The boldest projection came from SunTrust Robinson, which lifted its Chipotle price target to $780 from $770 -- well above the equity's record high of $758.60 from August 2015, and its three-year peak of $721.20 from April 9.

More bull notes could come down the pike if the stock bounces from its 40-day moving average -- a trendline that's ushered CMG to a 57% year-to-date gain, and is serving as support today. While 17 of 28 analysts maintain a "hold" or worse rating on Chipotle, the consensus 12-month price target of $662.50 is below the equity's current perch.


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