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Weekly equities forecast: Tesla, Alphabet, Lloyds

Article By: ,  Senior Market Analyst
July 22, 2024 7:16 AM

Tesla Q2 earnings preview

Tesla will report Q2 earnings after the market closes on Tuesday, June 23rd. Expectations are for EPS to come in at $0.61, down from $0.91 in Q2 2023 but higher than the $0.45 in Q1 2024.

Meanwhile, revenue is expected to be $20.16 billion, which is around 5% lower than the same period last year, but 16% above Q1 revenue of $17.38 billion.

Q2 deliveries were stronger than expected, at 444,000, but still represented a 5% decline compared to the same period last year.

Several factors have been dampening demand for Tesla vehicles, including high interest rates, which make it more expensive for customers to finance vehicle purchases. Furthermore, the aggressive price cuts that Tesla has implemented over the past year or so are easing, and competition is mounting, particularly in the Chinese market. In the domestic market, Tesla is losing market share to the likes of General Motors and Ford.

The earnings come as the company’s share price surged by 33%, a move that propelled Tesla’s valuation by $209 billion in the first eight days of the month alone.

Where next for TSLA share price?

The weekly chart shows Tesla’s share price has recovered from $140, 2024 low hit in April, rising above the 200 SMA and the falling trendline dating back to November 2021. Buyers will look to retake 278, the September 2023 high, ahead of $300, the 2023 peak, to extend gains further. Immediate support can be seen at 230, the 200 SMA, and $223, the falling trendline support. A break below here exposes the 100 SMA at $210.

Alphabet Q2 earnings

Google parent Alphabet will release Q2 earnings on July 23rd after the market close. Wall Street expects revenue to rise from this the year ago but earnings to fall. Investors are likely to focus on cloud growth and updates surrounding AI.

The tech giant is expected to report revenue of $84.3 billion, which would mark a 13% year-over-year increase, while EPS is expected to come in at $1.85, down from $1.89 in Q2 2023. However, the market will be watching for sustained growth in Google Cloud. Cloud segment revenue growth could help ease investor worries about big tech's increased spending on AI, which is expected to be $10.22 billion.

AI updates will also be in focus, particularly any news on projects like AI assistance, Gemini Live, and project Astra. These could help Alphabet compete with Microsoft's backing of openAI and offer insight into how AI is affecting Google search.

Where next for GOOGL share price?

After trending higher across the year, GOOGL ran into resistance at 191, a record high, and has eased lower. The price is testing the 50 SMA at 176.00, which is also the May high. Sellers, supported by the RSI below 50, could break below here to test the 100 SMA at 165.00 and 150.00, the April low, and the 200 SMA.  On the upside, should the 50 SMA hold, buyers could look to re-test 191.00 and fresh ATHs.

Lloyds H1 results preview

Lloyds will kick off the UK bank reporting season this week and is not expected to be the top performer. The UK’s largest mortgage lender is expected to report a pre-tax profit of £3.2 billion for H1, down from £3,9 billion reported in the same period last year.

After acquiring Building Society Halifax, mortgages became an even bigger part of the business, but volumes remain depressed as the BoE keeps interest rates at a 16-year high and as competition in both the mortgage and savings markets intensifies.

Net interest margin (NIM) has been guided for 290 basis points in 2024, with expectations of three base rate cuts. However, given the stickier-than-expected UK service sector inflation and still strong wage growth, three wage cuts this year may be rather optimistic.

Where next for LLOY share price?

Lloyd's share price has risen throughout the year and is now just below 60p, the highest level since before COVID. The share price has continued to rise despite the FTE falling from record highs earlier in the year.

Buyers will look to rise above 60p to 61p. On the downside, the 50 SMA offers support at 56.20p.

 

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