Are you an electric vehicle bull looking for something to be thankful for today? Start with Fisker (NYSE:FSR). Shares of the high-flying electric car company are up more than 20% in intraday trading. But what is behind the run in FSR stock? And what else do you need to know?
Broadly, Fisker and its EV peers have continued to captivate investors in recent weeks. Two big catalysts come from U.S. politics. To start, President Donald Trump has allowed the transition process to President-elect Joe Biden to begin. For electric car stocks, this means that dreams of huge consumer adoption look like a reality. Additionally, legacy automaker General Motors (NYSE:GM) has sided with California on zero-emissions targets. That makes everything look a bit greener for FSR stock and its peers.
However, one massive analyst call has FSR stock soaring on Wednesday. Here are 10 things you need to know now:
- The call in question comes from Citigroup analyst Itay Michaeli.
- Michaeli initiated coverage on FSR stock Wednesday, assigning it a “buy” rating.
- Additionally, he set a price target of $26. That currently implies upside of 30%.
- However, at the time of his call, that price target implied a whopping 60% move higher.
- Although Michaeli is bullish on Fisker, he did warn investors about the company.
- He said that FSR stock is risky, especially because Fisker is a pre-revenue company.
- Importantly, it is still working on launching its Ocean SUV, and has plans for a handful of other models in development.
- Acknowledging the risks, Michaeli is a fan of the Ocean SUV.
- He thinks that unlike other EV companies, it is a smart move to focus on the SUV market first.
- Additionally, he likes the targeted price range of $38,000-$69,000 for Fisker vehicles.
Why the Citi Call Matters for FSR Stock
So why does this one analyst call have FSR stock up more than 20%? Well, investors should remember that Fisker is relatively new to the public markets. The company just recently closed its reverse merger with blank-check company Spartan Energy Acquisition. This means that it is hungry for institutional support, especially as retail investors dive in.
On that note, at least according to TipRanks, Michaeli is now just the second Wall Street analyst to have initiated coverage on FSR stock. Beating him was Cowen analyst Jeff Osborne, who set a $22 price target nine days ago. Will more analysts follow? And how high will these 12-month price targets go? Investors seem willing to take EV stocks to the moon right now.
Investors should also note that beyond the Ocean SUV, Michaeli likes a few other things about the Fisker business model. In a recent announcement, the company shared it was forming a production partnership with Magna International. Through the deal, Magna will manufacture the Fisker vehicles. Additionally, the two companies will work together to innovate in the EV space and share ideas. Compared to other firms still trying to build factories and prepare for production, Michaeli said this makes Fisker an asset-light bet.
Keep a close eye on FSR stock. As today proves, investors are in love with the up-and-coming electric vehicle company.
On the date of publication, Sarah Smith did not have (either directly or indirectly) any positions in the securities mentioned in this article.
Sarah Smith is a Web Content Producer for InvestorPlace.com.