Why Tesla Inc (TSLA), Nvidia Corporation (NVDA) and L Brands Inc (LB) Are 3 of Today’s Worst Stocks

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The bulls were kept at bay again today, though the bears fared no better. By the time the closing bell rang, the S&P 500 was at 2,363.81, up a mere 0.04%, with traders struggling to find a worthy justification for the recent run up.

Why Tesla Inc (TSLA), Nvidia Corporation (NVDA) and L Brands Inc (LB) Are 3 of Today's Worst StocksIt could have been worse though. Tesla Inc (NASDAQ:TSLA), Nvidia Corporation (NASDAQ:NVDA) and L Brands Inc (NYSE:LB) were all upended in a big way following alarming news.

Here’s what investors need to know about each meltdown.

L Brands Inc (LB)

L Brands, the parent company of Victoria’s Secret and Bath & Body Works, may be upbeat about its future, but the 15.8% plunge LB shares dished out on Thursday says the market isn’t quite as optimistic.

For the quarter ending in January (which encompasses the all-important holiday shopping season), L Brands earned $2.03 per share vs. expectations for a profit of only $1.90 per share of LB. Revenue of $4.49 billion was right in line with estimates, and co-wide same-store sales were flat … a relative victory in today’s tough retailing environment.

The retailer sees a headwind brewing for the year currently underway, however. L Brands suggested it would earn between $3.05 and $3.35 per share for its fiscal 2017, which compares unfavorably to an average analyst estimate of $3.70 per share of LB. The company earned $3.98 per share last year, and $4.22 per share in fiscal 2015.

Nvidia Corporation (NVDA)

Up more than 240% over the course of the past year, at least some Nvidia shareholders were wondering if NVDA stock was overextended. They got their answer today, at the hands of research outfit Instinet. Instinet downgraded NVDA from “Buy” to “Reduce,” and simultaneously lowered its price target on the stock to $90.

Analyst Romit Shah explained, “We believe datacenter and automotive will be solid long-term growth drivers, but the implied value that the market is ascribing to these emerging businesses is unsustainable.” Although Shah still likes the company and its outlook, with a trailing price-to-earnings ratio of 39.1 and a forward-looking P/E of 30.4, he may have a valid point about Nvidia shares.

NVDA ended the day down 9.3%.

Tesla Inc (TSLA)

Last but not least, electric car maker and energy storage name Tesla saw its stock fall to the tune of 6.4% on Thursday following a disappointing earnings report posted after Wednesday’s close.

The good news is, sales of $2.28 billion handily topped estimates of $2.19 billion. The bad news is, the loss of 69 cents per share was worse than the loss of 43 cents per share of TSLA analysts were expecting.

The bulk of the selloff TSLA owners suffered today, however, may have been in response to news that the company is likely to issue shares or debt in order to raise capital. It has been an all too familiar theme with Tesla, repeatedly going out to the open market with its hand out for cash. Some shareholders were hoping that was in the past, but the company’s not quite ready to be self-sustaining just yet.

As of this writing, James Brumley did not hold a position in any of the aforementioned securities.


Article printed from InvestorPlace Media, https://investorplace.com/2017/02/why-tesla-inc-tsla-nvidia-corporation-nvda-and-l-brands-inc-lb-are-3-of-todays-worst-stocks/.

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