By Claudia Assis
The three EV makers are 'forlorn phoenixes' that could rise again, Evercore analysts say
Shares of Fisker Inc., Lucid Group Inc., and Rivian Automotive Inc. are set to recover from their steep losses as the electric-vehicle makers become "major players over the next decade."
That's from analysts at Evercore ISI, who started covering the stocks of Fisker (FSR), Lucid (LCID) and Rivian (RIVN) in a note Wednesday. The EV makers have struggled to recapture Wall Street's favor after recent double-digit declines and months of underperformance for their shares.
"While there has been a pronounced 'fall from grace' of our new EV OEMs (and all EV names), we believe these forlorn phoenixes could rise again as expectations have been vastly tempered and forecasts are close to reset," the analysts, led by Chris McNally, said in the note.
Evercore singled out Fisker stock as their favorite among the three, rating it at the equivalent of buy and with a $15 price target, representing 100% upside over Wednesday's prices.
That's because Fisker has a completely different business model, Evercore said.
Fisker is often called the "Apple of autos" as it focuses on its cars' looks and interfaces, leaving manufacturing to contracted companies such as auto-parts maker Magna International Inc. (MG.T) and others.
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In the near-term, Fisker can leverage those manufacturing agreements and avoid the $5 billion to $8 billion in capital funding through 2026 that Rivian and Lucid are likely to need, the Evercore analysts said.
"We believe Fisker is also a unique combination of blank-sheet EV-tech (solid range, zonal architectures, attractive interior/ADAS and unique design) while offering a mass-market SUV" around $40,000 to $70,000.
Evercore started coverage of Lucid shares with the equivalent of hold and a $12 price target, implying upside of about 20% over Wednesday prices.
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Lucid enjoys "a clear-cut e-powertrain advantage," with an apparatus that is smaller than competitors and with "better power/weight ratio and mileage efficiency," Evercore said.
Moreover, its plans to enter cheaper EV segments "offers an eventual path toward success," the analysts said.
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Rivian is "the largest and most well-funded company" of the three, the Evercore analysts said. They started coverage of the stock with the equivalent of hold and a $35 price target, representing upside of around 19%.
Rivian took the initial public offering market by storm in November 2021, pricing the IPO at $78 a share. The stock is off more than 60% from that price and more than 80% from a $172.01 peak hit shortly after the company became public.
Rivian's electric pickup truck is "garnering rave reviews for its branding and unique tech/features," and Rivian is working on the launch of an electric SUV using a smaller, less costly platform.
The "hold" rating on Rivian has a positive bias, the Evercore analysts said, as "we believe a catalyst path exists as we progress through" next year, they said.
Key questions on Rivian's path are its manufacturing ramp, vertical integration and the speed it will be up to scale its production; its funding needs, hovering around $4 billion to $6 billion; and by how much it would expand its market with the introduction of a cheaper SUV, Evercore said.
Evercore aptly has called all three stocks "phoenixes": Their trajectory this year far underperforms the S&P 500 index.
Lucid shares have lost 74%, and shares of Rivian are down 71%. Fisker shares have dropped 53%. Their performances compare with a 17% loss for the S&P in the same period.
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11-30-22 1259ETCopyright (c) 2022 Dow Jones & Company, Inc.