Written by Cláudio Afonso | LinkedIn | X
Citi analyst Itay Michaeli lowered on Thursday the firm’s price target on Polestar shares from $2.50 to $1.70 per share while maintaining a Neutral rating.
In a new research note, the firm says it will adjust its evaluation once Polestar files its annual report from 2023 as it lowers the estimates given the “softer deliveries” in the first quarter.
Polestar has recently announced that it would postpone the release of its financial results for the fourth quarter and full year of 2023 for the second time.
“We’re refreshing our Polestar model to reflect recent data points including vehicle deliveries and external financing. With the delayed 20F filing, our Q4’23 numbers remain estimates. We will revisit our model once Polestar files fresh financials. Given the softer Q1 deliveries and other recent data points, we’re lowering estimates,” the analyst wrote.
Citi also increased its estimates for Polestar‘s free cash flow burn while adding that delayed annual report and the identified errors in previous annual reports caused the reduction of the price target to $1.70 per share.
“Our cumulative 2024E-2026E free cash flow burn widens to $2.2 billion from $1.7 billion, and 2030E adj. EBITDA revised down 7 percent,” Michaeli commented.
NEVER MISS AN UPDATE
“Our big-picture view of the story hasn’t changed much, but the delayed 20F (including identified historical errors), reduced estimates, and execution risks prompt us to reduce our price target to $1.7 from $2.5, as we apply a higher discount rate and lower terminal multiple (25 percent vs. 15 percent prior, 17x vs. 20x prior) to reflect these factors. Maintain Neutral/High Risk rating,” the analyst added.
In a new SEC filing, the company said it is “unable” to file its 2023 Annual Report which was originally scheduled to the published on February 29 before being delayed to the last day of April.
Polestar claims in the SEC filing the existence of “certain errors” in the 2021 and 2022 annual and interim financial statements adding that it will file Form 20-F “as soon as practicable”.
Following the adjustments needed to correct both 2021 and 2022 statements, the company anticipates a decrease of less than 5% in its net loss for 2021 and an increase of less than 5% for 2022.
NEVER MISS AN UPDATE
Polestar announced last month the arrival of the Polestar 4 SUV to the US market. The first deliveries are planned for the last quarter of the year with the model starting at $55,000 as the company faces extreme pressure from shareholders.
As online sales commence today in the U.S., production is scheduled to begin in the US during the third quarter. The brand delivered “approximately 7,200 cars” globally in the first quarter.
CEO Thomas Ingenlath had recently addressed shareholders emphasizing the company’s commitment to succeed with the latest models 3 and 4. Ingenlath added also the final prototype of the Polestar 5 will be completed this year.
Earlier this year, Volvo Cars announced the plan to discontinue funding its Polestar electric sports car brand. On April 5th, the automaker announced that its shareholders agreed to distribute “a portion” of Volvo Cars’ stake in Polestar to its shareholders.
Written by Cláudio Afonso | LinkedIn | X
