LCID Stock: Why Lucid Shares Are Going in Reverse on Tuesday

Shares of Lucid Motors (NASDAQ:LCID) stock are taking a tumble on Tuesday after one analyst expressed particularly bearish sentiment about the electric vehicle (EV) firm.

A photo of the Lucid Motors Air EV from 2018.

Source: ggTravelDiary / Shutterstock.com

Morgan Stanley’s Adam Jonas initiated coverage of Lucid Motors earlier this week with an “underweight” rating and a price target of $12. This is a bit concerning due to the fact that LCID stock currently trades just under $19 per share. Thus, a drop to $12 per share would indicate a fall of more than 36% from current levels.

According to a note to clients, Jonas indicated that Lucid has the innovation and notoriety of its competitor Tesla (NASDAQ:TSLA). However, Jonas also questioned how large the market for this level of “premium EVs” truly is and if Lucid can thrive against its other competitors moving forward.

“At a $31bn valuation, the stock market appears to be ascribing an unusually high probability of scenarios where LCID achieves very high market share, margins or both,” he said. “Where [does Morgan Stanley] shake out? [Morgan Stanley] think[s] LCID can occupy a sustainable niche place in a difficult market but, at this stage, we see many obstacles left to hang with more established EV titans and grow into its valuation.”

Twitter Reacts to LCID Stock News

Unsurprisingly, this news caused some major chatter about Jonas and LCID stock on Twitter. That being said, here are a few tweets from investors about the latest Lucid Motors stock analysis.

Some even criticized Jonas directly due to previous price predictions for other EV firms.

LCID stock was down about 5.5% as of Tuesday afternoon.

On the date of publication, Nick Clarkson did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

Nick Clarkson is a web editor at InvestorPlace.


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