Written by Cláudio Afonso | LinkedIn | X
Shares of the EV maker Lucid Motors soared over 14% on early Tuesday after Morgan Stanley analyst Adam Jonas upgraded the stock’s rating and reaffirmed a bullish price target.
Following the recent stock price decline, the analyst sees the risks to upside as “more equilibrated with the risks to downside” bringing the firm’s rating on the shares from Underweight to Equalweight.
The unchanged price target of $3.00 implies an upside potential of 39% based on Monday’s closing price.
“More than an ‘EV 1.0’ automaker? Following the announced/ongoing changes in leadership, we believe Lucid has [the] opportunity to execute an AI strategy leveraging strategic/sovereign partnerships within the context of the urgency to develop onshore manufacturing capacity for BEVs as the ‘socket’ for the AI ‘brain,’ the analyst wrote.
The firm maintained the price target of $3 and the $10 target as its “Bull Case” scenario.
“We believe that at this stage, the risks to upside are more equilibrated with the risks to downside for Lucid shares – as such, we believe stock presents a more balanced risk reward, underpinning an Equal-Weight rating,” Jonas added.
The analys tnoted that Lucid’s recent Q4 2o24 results were largely in line with bearish expectations, adding that a potential shift in the company’s outlook under new leadership warranted a reassessment.
“It’s difficult for us to see how near term quarterly results introduce new negative information that a bearish consensus doesn’t already expect. Given the challenges to the stand-alone automaker business model, we move to EW on the emergence of a potentially bullish thesis to the Lucid story with a new leadership team,” Morgan Stanley analyst wrote.
Jonas added that the EV maker might benefit from “access to capital and strategic relationships” while collaborating with both China and the West.
“We see emerging scope for Lucid‘s ability to play a role in the embodied AI theme as an reshored/’friend-shored’ manufacturer with access to capital and strategic relationships that uniquely position Lucid to straddle geopolitical hurdles in potentially partnering with both China and the West,” he added.
Benchmark analyst Mickey Legg met earlier this month with the company’s management and released a new note attributing a ‘Buy’ rating on Lucid shares and a $5.00 price target.
The company reached a new sales record in the U.S. with 805 units sold in February, according to Motor Intelligence estimates.
The figures include 750 Air sedans and 55 Gravity SUVs. However, customer deliveries of the brand’s second model have not yet started. The first few units were delivered on the final week of last year to family, friends, and employees.
Lucid reported its fourth-quarter earnings results in late February and announced, on the same day, that its CEO and CTO Peter Rawlinson had stepped down with immediate effect.
