Canoo (GOEV) stock price has continued its strong downfall, moving to its lowest level on record as doubts about its future have remained. It slipped to a low of $0.55 on Friday, bringing the year-to-date losses to 90%. This makes it one of the worst-performing companies in Wall Street, and one that many analysts expect will turn into the next Fisker. 

Good products and progress bit problems remain

Canoo is one of the top companies that seeks to become the next big thing in the automobile industry.

It focuses on the utility industry, where its vehicles are designed for use by retailers, small businesses, and delivery giants like UPS, FedEx, and DHL.

Canoo is building a few vehicles. The LDV 190 has a maximum payload of 1,624 pounds and a maximum range of 200 miles, and the LDV 130 has a maximum range of 1,432 pounds and a range of 217 miles. 

Canoo is also working on the LV, a SUV starting at $43,500, and a pickup truck that aims to compete with the likes of Ford and Rivian.

The company has made several achievements in the past few years. It has recently received the approval of its Foreign Trade Zone approval in Oklahoma City, a move that it expects to save it millions of dollars in the near term. The approval also came with incentives worth $115 million.

Canoo has also received orders from some of the top companies in the US like Walmart and USPS. Its order backlog stands at over $3 billion, with $750 million being confirmed. 

The company also bought manufacturing equipment from Arrival, a collapsed British electric vehicle firm. The benefit of this is that it received these items at a cheaper price since the company was in administration. 

Read more: Canoo stock price analysis: GOEV bankruptcy risks are elevated

Mountain of challenges remain

The challenge for Canoo is that its business and the broader electric vehicle industry is going through a rough patch. 

Recent data shows that most small and large businesses still prefer buying vehicles with internal combustion engines (ICE). 

The EV industry is still in its infancy, with the infrastructure that is needed being significantly off. That explains why many EV companies are struggling, with many dealers finding it difficult to sell their vehicles. 

Fisker and Lordstown Motors which had a lot of promise have collapsed. Similarly, companies like Rivian and Lucid Motors have become cash incinerators, burning billions of dollars in the past few years. 

Just last week, Ford announced that it would pause manufacturing of its electric lightning product, in a sign that there was no demand. 

The biggest issue that Canoo faces is that its balance sheet does not have enough money to push it forward. Earlier this year, the management even issued a going concern warning, hinting that its cash was at risk of running out in the foreseeable future.

Just last week, the company announced that it was furloughing 30 workers in Oklahoma, a big number that represented about half of the workforce. That is a sign that curtains are falling on the company, as I have warned before.

Read more: Another bad EV news sends shockwaves to Lucid, Fisker, Canoo stocks

Canoo’s cash reserves are running out

Data compiled by SeekingAlpha shows that Canoo ended the last quarter with just $9.9 million in cash and short-term investments. While this is a lot of money, it is a tiny amount for a company that is burning millions more per quarter.

Canoo also has a mountain of debt, with $47.2 million in short-term debt and $28.6 million in long-term debt. 

In the past, it was possible for Canoo to buy time by raising cash through selling shares. Now, however, its equity is value has dropped to just $47 million. This means that its fundraising would not be enough even if it raised all these funds.

Therefore, with Canoo, we have a company in an industry that is not doing one, one that is burning cash at a fast pace, and one that is burning cash at a rapid rate. I believe that the company will likely file for bankruptcy in the coming months. 

Canoo stock price analysis

GOEV chart by TradingView

The daily chart shows that the GOEV share price has been in a strong bearish trend for a long time. It engineered a stock split in March in a bid to maintain its NASDAQ listing, but the stock has moved below $1 once again. This means that it will need to do another reverse split to maintain the listing.

Canoo shares have moved below the key support level at $1.24, its lowest point on March 14. It has also moved below the 50-day and 100-day moving averages, meaning that bears are in control.

Therefore, the path of the least resistance for the stock is downwards, with the next point being at $0.20, which is much lower than the current level. The next potential catalyst will be its earnings on November 14.

The post Canoo stock analysis: the end is nearing for GOEV appeared first on Invezz

Coupang (CPNG) stock price has done well this year, rising by 56% since January, beating popular indices like the Nasdaq 100, S&P 500, and the Dow Jones. It has also outperformed other popular technology companies like Amazon and MercadoLibre.

Coupang is a fast-growing company

Coupang is a top company in the e-commerce industry, where it operates the most popular brand in countries like South Korea, Japan, and Taiwan. 

Over the years, the company has expanded its solutions to include Rocket Delivery and Farfetch, which it acquired earlier this year. It hopes that Farfetch, a loss-making company, will help it become a leading player in the luxury fashion industry. 

Coupang, like other companies in the e-commerce industry, has also expanded its business to the advertising market. This is one of its fastest-growing and highest-margin business since it lets sellers on its platform boost their visibility. 

Coupang’s business has been growing, with its annual revenue moving from $5.83 billion in 2022 to $7.11 billion last year. 

This growth has continued in the past few years. The most recent financial results showed that its revenue rose by 25% YoY to $7.3 billion. Part of this revenue growth was because it included FarFetch. Excluding the company, its revenue was up by 18%.

This growth happened as the number of customers in its platform jumped from 19.4 million in Q2’23 to 21.7 million last quarter. Most of its growth was because of more spending by its existing customers. 

The company’s margins also continued doing well, with the gross margin moving to $2.1 billion. This gross profit margin rose by 310 bps during the quarter. 

A key challenge for Coupang is how to operate Farfetch profitably since the company lost about $500 million in the first half of 2023. In the last earnings call, the management noted that its developing offerings would have an EBITDA loss of $750 million this year. The management said:

“On Developing Offerings last quarter, we updated our full year guidance of adjusted EBITDA losses of roughly $750 million this year, including Farfetch.”

Coupang earnings ahead

The next important catalyst for Coupang will be its earnings, which are scheduled to happen on Tuesday.

Analysts expect that its business continue firing on all cylinders during the quarter. Precisely, they expect that the revenue rose by 30% to $7.76 billion. Part of this growth will be because of its Farfetch business. 

Analysts also expect that its fourth-quarter revenue guidance will be $8.25 billion, a 25% increase from the same period last year. For the year, analysts expect that its revenue will be $30.4 billion, followed by $35.75 billion in 2025.

Analysts also believe that Coupang stock is fairly undervalued. For one, it has a strong balance sheet, with over $5.53 billion in cash and short-term investments. It ended the last quarter with $254 million in restricted cash and $2 billion in inventories.

Most notably, it has little debt, with short-term borrowings of $336 million and long-term debt of $1.04 billion. Most of this debt came from its Farfetch buyout.

The challenge, however, is that Coupang has lower margins than some of its peers. It has a gross profit margin of 27% compared to MercadoLibre’s 55%. Its net income margin of 3.8% is much lower than MELI’s 8.8%. 

The average Coupang stock price forecast is $28.5, about 12% higher than the current level. Some of the most bullish analysts are from companies like Bernstein, CLSA, Morgan Stanley, and UBS.

Coupang stock analysis

Coupang chart by TradingView

Coupang share price has done well as I predicted in my last report on the company. It jumped and reached the year-to-date high of $26.35 last week. 

The daily chart shows that it has formed a double-top chart pattern at $26.25. In most periods, this is one of the most bearish patterns in the market.

Coupang has remained above the 50-day and 100-day Exponential Moving Averages (EMA), meaning that bulls are in control for now. 

Therefore, because of the double-top, there is a risk that the stock will drop and retest the 50-day moving average at $24.51, which is about 4% below the current level. A drop below that swing could see it fall and retest the support at $23.73, its highest level on May 7, which is 6.70% below the current level.

The post Coupang stock forms a risky pattern, pointing to a post-earnings dive appeared first on Invezz

Malaysian palm oil futures have climbed significantly, driven by the rise in global oil prices, as investors shift focus towards renewable energy sources like biodiesel.

January contracts on the Bursa Malaysia Derivatives Exchange hit 4,876 ringgit per metric ton, responding to OPEC+’s decision to postpone an output hike until December.

This move bolstered the demand for biodiesel alternatives, positioning palm oil as a cost-effective choice in the renewable energy market.

Vegetable oil market responds to broader global trends

The rally in palm oil prices reflects broader trends in vegetable oils, which are experiencing similar gains across global markets.

On China’s Dalian Commodity Exchange, soyoil rose by 1.59%, while Chicago’s saw a moderate increase of 0.39%.

This correlation highlights the interconnectedness of the vegetable oil sector with global energy markets, as oil price hikes typically increase biodiesel’s appeal.

Strengthening ringgit impacts export prices

A rising ringgit poses challenges for Malaysian palm oil exports, as a stronger currency makes palm oil more expensive for foreign buyers. Despite this, Malaysian exports rose by approximately 11.5% in October, showcasing continued demand.

A sustained increase in the ringgit may impact future export levels, presenting a potential balancing act for the industry.

Indonesia raises export tax to strengthen palm oil market

In response to rising global prices, Indonesia adjusted its palm oil strategy by increasing the export tax on crude palm oil.

With the reference price climbing, this move aims to manage domestic supply and maintain export competitiveness. Indonesia’s policy shift reflects its role as a major palm oil producer, closely tied to the market’s international dynamics.

OPEC+ postponement boosts biodiesel demand

OPEC+’s decision to delay output hikes until December is another factor increasing palm oil’s value in biodiesel production.

This strategic shift supports higher oil prices, amplifying biodiesel’s cost-effectiveness and contributing to the rising appeal of palm oil as a renewable energy source.

This trend could drive further investments in the renewable energy sector, with biodiesel emerging as a competitive alternative.

The role of biodiesel in shaping the future energy transition

The rise in Malaysian palm oil futures underscores the growing importance of biodiesel as global markets transition towards renewable energy.

With palm oil positioned as a vital component, ongoing shifts in oil output strategies could sustain demand for biodiesel, prompting broader impacts across commodity markets.

As renewable energy gains momentum, palm oil’s role in the biodiesel market is likely to continue its upward trend.

The post Rising global oil prices fuel Malaysian palm oil market gains appeared first on Invezz

Ferrari (RACE) stock price has done well this year, rising by 40%, and making it one of the best-performing players in the automobile industry. It rallied to a record high of $497.68 on September 3, bringing its valuation to almost $90 billion. 

Ferrari’s performance is significantly different from other premium automakers like Porsche and Aston Martin. Porsche, a well-known luxury automaker, has fallen by over 30% from its highest level this year. Similarly, Aston Martin Lagonda (AML) has crashed by 70% from last year’s highs.

Ferrari has also beaten other popular automakers like Toyota, Tesla, General Motors, Ford, and Stellantis.

Modest growth

Ferrari’s stock performance happened at a time when its revenue growth has been relatively modest. Its annual revenue in 2023 came in at $6.5 billion, higher than the $5.4 billion it made in the previous year. 

Ferrari’s strong pricing power has also made it one of the most profitable automakers brands in the industry. Its annual profits have moved from $780 million in 2019 to over $1.38 billion last year. 

The company’s performance is mostly because of three main reasons. First, unlike other mainstream automakers, it is not at risk of disruption from Chinese companies like BYD, NIO, and XPeng, which focus on the mainstream market.

Instead, Ferrari’s business is secure, a trend that will continue as the number of wealthy individuals continue to rise in the coming years. This trend explains why most of its recently announced vehicles have attracted substantial demand. Some of its recent launches are 12 Cilindri and Ferrari F80, which is the successor to LaFerrari.

To be sure, the latter has been criticized by many enthusiasts because of its appearance and the fact that it comes with a V6 engine. Still, there are signs that the vehicle is doing well in the market. Its order book has moved all the way to 2026.

Ferrari has also done well because of its focus on internal combustion engines (ICE), which are doing better than electric vehicles today. To be sure: Ferrari is still working on its EV, but the management has put most of its investments in the ICE business.

Additionally, Ferrari Racing segment is doing well. The company won the 24 hours of Le Mans, and is on track to be second or even first in Formula 1, where it is position 2 after McLaren. It is also beating Red Bull.

Ferrari is also less exposed to the geopolitical issues in the United States and China. It will likely be less impacted by the upcoming US election since it is an Italian brand.

Ferrari earnings ahead 

The next important catalyst for the Ferrari stock price will come out on Tuesday when it publishes its financial results.

The last financial results showed that Ferrari’s revenue rose to 1.7 billion euros, while its EBITDA moved to 669 million euros. Its net profit came in at 413 million euros during the quarter.

This growth came as the company shipped 3,484 cars during the quarter, a small increase from the 3,392 it sold in the same period last year. Most of its shipments went to the EMEA region, followed by the Americas, Rest of the World, and China.

Analysts expect that Ferrari’s revenue will be $1.78 billion, while its earnings per share rose to $2.16. Its annual revenue is expected to come in at $7.2 billion, a 13.5% increase from the same period in 2023.

The key concern for Ferrari is that its valuation has become stretched. While the company deserves a premium, its valuation metrics are out of this world. 

Ferrari has a forward price-to-earnings ratio of 55, higher than the sector median of 18.40. Its non-GAAP PE ratio is 57.7, higher than the sector median of 14.50. These numbers are much higher than other premium companies that are doing well.

For example, Microsoft has a forward P/E ratio of 31.2, while Amazon has a multiple of 39. Most notably, Ferrari is more expensive than NVIDIA, which has a forward multiple of 49.60. 

Ferrari stock price analysis

RACE chart by TradingView

The daily chart shows that the RACE stock price has been in a strong bull run in the past few months. It has constantly formed a series of higher highs and higher lows. 

Also, the stock has moved above the 50-day moving average, making it one of the best-performing companies. 

However, there are signs that it has formed a double-top pattern, a popular bearish sign in the market. In most periods, this pattern is followed by a strong bearish breakout. 

Therefore, the Ferrari stock price will likely pull back after its earnings on Tuesday. If this happens, it will likely drop to the neckline at $446.41, its lowest point on October 3. On the positive side, a break above the double top point at $497 will point to more gains.

The post Ferrari stock forms a dangerous pattern ahead of earnings appeared first on Invezz

Chinese exporters are growing increasingly anxious as former US president Donald Trump considers implementing a 60% tariff on all Chinese goods if re-elected.

With the US being China’s top trading partner, importing over $400 billion in goods annually, the proposed tariffs would hit numerous sectors and could impact the global economy.

Many Chinese manufacturers rely heavily on the US market, including Hebei Yiyue Glass Products, where 80% of its glassware exports head to the United States.

Amid fears of a steep economic downturn, Chinese firms are scrambling to find alternative markets.

Li Wei, who manages a glass factory in northern China, is actively seeking export destinations to offset potential losses.

However, diversifying away from the US market has proven challenging, given its sheer size and purchasing power.

Tariffs threaten to cut 2.5% off China’s GDP growth

UBS economists warn that Trump’s proposed tariffs could reduce China’s GDP growth by 2.5 percentage points over the next year.

This would come at a time when China’s economic growth is already under pressure from a sluggish property sector, declining consumer spending, and low levels of household confidence.

China’s government has targeted around 5% growth for the year, but with new tariffs, achieving this goal could become increasingly difficult.

Beyond GDP, the impact of a trade war on Chinese businesses would be immediate and severe.

Gary Ng, senior economist at Natixis, notes that for some manufacturers, profitability in the US market could vanish under 60% tariffs, with repercussions likely to ripple across China’s broader economy.

Major exporters, such as electronics maker Sotech in Shanghai, fear they may lose their US clients altogether, leading to potential layoffs and revenue losses.

Exporters look to new markets but find limited alternatives

As US-China trade tensions escalate, Beijing is pivoting to new trade relationships.

In recent years, China has strengthened its economic ties with African and South American nations.

In September, China hosted representatives from 50 African nations for the Forum on China-Africa Cooperation, aiming to bolster African demand for Chinese exports such as solar panels and electric vehicles.

Similarly, South American countries are increasingly sourcing Chinese products as bilateral ties grow.

Nevertheless, replacing the massive demand of the US market remains a daunting task for most Chinese firms.

Exporters worry that while new markets provide opportunities, they cannot match the volume or profitability of the US market.

A recent surge in tariffs by the European Union and Canada on Chinese electric vehicles further complicates efforts to shift export destinations.

US inflation and GDP to face consequences from tariff increase

The Peterson Institute for International Economics (PIIE) predicts that US inflation could rise by 0.4% by 2025 if Trump’s tariffs go into effect, potentially hurting American consumers and businesses alike.

A GDP loss of 0.23% is also expected by 2027, particularly if China retaliates with its own trade measures.

Rising costs on imported goods could dampen consumer spending and squeeze profit margins, making the proposed tariffs a double-edged sword for the US economy.

Chinese exporters consider production shifts to bypass US tariffs

To mitigate risks, some Chinese manufacturers are exploring ways to indirectly access the US market.

Companies like Hebei Cangzhou New Century International Trade are exploring partnerships with manufacturers in Indonesia, allowing them to route products through intermediary countries before shipping to the US.

While this approach may provide temporary relief, it also adds complexity and costs, which smaller firms may struggle to absorb.

Along with seeking alternative routes, Chinese authorities are reinforcing domestic support for affected sectors.

Beijing has launched anti-dumping investigations on select Western imports and imposed export controls on key semiconductor materials, signalling its intent to respond to rising global trade barriers.

Nonetheless, with tariffs being adopted by multiple Western nations, this approach offers limited relief to many exporters.

Trade war escalation signals long-term challenges for global trade

As Trump’s proposed tariffs loom, businesses on both sides of the Pacific brace for heightened trade tensions.

Should tariffs rise as proposed, a significant shift in the global economic landscape could follow, with China doubling down on efforts to reduce its dependence on the US market.

As seen with previous trade wars, finding effective substitutes for the vast American market is not easy.

For exporters like Li Wei, the tariffs pose a personal and professional challenge.

The possible loss of access to the US market has cast uncertainty over his glass-making business, which has doubled its workforce and production since he took the reins in 2020.

If the tariffs materialise, he faces the tough choice of downsizing or seeking costlier alternatives, a predicament shared by many in China’s export-driven economy.

As policymakers, economists, and businesses anticipate the election outcome, the stakes remain high.

For both the US and China, the consequences of a renewed trade war could prove costly and reshape the dynamics of global trade well into the future.

The post China’s small manufacturers brace for impact as Trump plans 60% tariffs appeared first on Invezz