Why Tesla and Carnival Saw Their Stocks Fall Monday

The stock market didn't kick the new week off very well, as major market benchmarks lost ground on Monday. Damage in the Dow Jones Industrial Average (^DJI 0.40%) was limited, but larger declines took the Nasdaq Composite (^IXIC 2.02%) and S&P 500 (^GSPC 1.02%) lower.

Data source: Yahoo! Finance.

Shares of Tesla (TSLA -1.11%) have seen big moves higher in recent months, but the EV stock gave back some ground on Monday. Meanwhile, Carnival (CCL -0.66%) reported financial results that seemed to indicate that the recovery in the cruise ship industry continued apace, but that wasn't enough to keep the stock from giving up substantial ground. Read on to find out more about both of these companies and what made their shares move on Monday.

Even stock analysts give mixed messages on Tesla

Tesla stock suffered a 6% decline on Monday. The move came even as the EV pioneer received comments from a Wall Street analyst that had both good and bad elements to it.

Analysts at Goldman Sachs (GS 1.79%) downgraded Tesla shares from buy to neutral, which at first glance would seem to imply that a tougher path for the automaker lies ahead. Yet the same report boosted Goldman's price target on Tesla to $248 per share, up $63 from its previous target. Indeed, the analysts seemed to make the move based almost exclusively on the huge move higher in the stock so far in 2023, saying that the stock price now more fully accounts for the growth potential that Tesla has both in its auto business and in other areas like charging systems and battery storage.

The biggest takeaway from Goldman's call is how silly analyst ratings and price targets can get when stock prices move sharply in a short period of time. It's easy to misinterpret those analyst ratings if you look only at the headline move and don't look into the details of what the analyst actually said about the company at issue. That's especially true with Tesla, which is far more volatile than the typical individual stock.

Carnival sinks on earnings

Shares of Carnival finished lower by nearly 8% on Monday. The move came even as second-quarter financial results for the period ended May 31 showed continued upward momentum in the cruise ship operator's business.

Carnival's quarterly numbers looked strong. Revenue of $4.91 billion was a record for the period and more than doubled year over year. Carnival reversed a year-ago operating loss with a modest profit, and even after adding in interest expense, net losses narrowed considerably from the same period a year earlier. Per-share losses came in at $0.32, which was a lot better than Carnival had projected previously.

Moreover, other signs of accelerating demand were apparent. Total bookings during the quarter reached an all-time high, with customer deposits hitting $7.2 billion. Carnival said it has started to push ticket prices back upward, and it's still seeing record levels of on-ship spending even as it returns more ships to service.

Yet most of those watching Carnival stock figured that the decline came simply because the cruise ship operator's share price has risen by a substantial amount so far in 2023, having roughly doubled. Moreover, the high levels of interest expense highlight the fact that Carnival had to take on a lot of debt to make it through the pandemic, and it could prove difficult for the cruise ship company to maintain and deal with that debt as it comes due in the years to come.