Written by Cláudio Afonso | LinkedIn | X
Cantor Fitzgerald analyst Andres Sheppard issued a research note on Sunday, maintaining the firm’s optimistic outlook on Polestar, Geely’s electric vehicle (EV) brand.
The note follows the 2023 financial results published by the EV maker last week reporting wider losses. As of the time of writing, Polestar shares are trading 6.50 percent higher at $0.837.
Sheppard reiterated the firm’s 12-month price target of $5 and the overweight rating for Polestar, stating, “Our 12-month $5 price target and Overweight rating are unchanged, pending a full model update”.
“We arrive at our price target via a 10-year bottoms-up Discounted Cash Flow (DCF). We assume an 11 percent Weighted Average Cost of Capital (WACC) and a terminal value with a 2 percent long-term growth rate,” he added.
On Thursday, the company delivered the first units of the Polestar 3 at its headquarters in Gothenburg, Sweden. Earlier in the day, the company said it would start offering a new entry-level variant for the SUV with the introduction of a new Long Range Single Motor variant.
The analyst pointed out several key risks that could impact Polestar’s performance including continued supply-chain disruptions, manufacturing constraints, high cost of goods sold, a highly competitive market, and slower-than-expected customer adoption.
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In 2023, Polestar’s revenue reached $2.377 billion, down 3 percent from $2.445 billion in 2022. The company registered a loss of $414.7 million last year, a significant change from a profit of $98.4 million in 2022 while the gross margin was -17.4 percent compared to positive 4.0 percent in the year before.
Polestar said its gross profit margin “met earlier guidance” adding that the results were “affected by non-cash impairment charges of approximately $450 million, related to Polestar 2 assets and inventory impairment”.
Earlier in the week, the EV maker launched the refreshed Polestar 2, featuring design updates, a revamped pack structure, increased range, and more individual options. Since the launch of the first iteration, the company has delivered more than 160,000 units across 27 markets.
Written by Cláudio Afonso | LinkedIn | X
