Electric vehicle (EV) stocks have had an electrifying 2021, but it seems that some of the momentum is fizzling out. Today, Guggenheim released a cautionary note initiating coverage on Lucid (NASDAQ:LCID) that has shares trading downwards. While LCID stock has appreciated more than 275% year t0 date (YTD), it’s down 31% in the past month.
Guggenheim analyst Ali Faghri mentioned that:
“In the near term, however, we believe EV adoption may fall short of industry forecasts, particularly in the US due to a less onerous regulatory backdrop and limited product launches in key market segments. We also see insufficient domestic charging infrastructure and battery capacity as near-term bottlenecks.”
While Faghri acknowledges Lucid’s experienced management team and innovative technology, he believes that any future upside is already priced into the stock price. Faghri gave LCID stock a “neutral” rating and a $38 price target. That is basically where the stock is currently trading. The price target factors in a premium multiple for strong management, fundamentals and 2025 projections.
According to TipRanks, Faghri has a 73% success rate and an average return of 21.2% over a one-year period. The analyst is regarded highly and ranks 487 out of 7,739 total analysts that TipRanks tracks.
Now we know how Guggenheim feels about LCID stock. With that in mind, let’s take a look at what other analysts on Wall Street think about the EV company.
LCID Stock Price Predictions
- Bank of America has a price target of $60, a Wall Street high. Analyst John Murphy sees Lucid as a legitimate threat to current EV makers, as well as legacy automakers. In terms of accessibility to capital, Murphy believes the market is healthy enough to support a dilutive equity raise. Murphy mentions that a 10% dilutive equity raise “could fund over three incremental plants and more than 750,000 incremental units of capacity, making the company a relatively large global luxury automaker.”
- Morgan Stanley has a price target of $16, a Wall Street low. Analyst Adam Jonas explained the reason for his relatively low price target is that “Scaling production is historically the riskiest part of a company’s lifecycle. This risk is compounded by unprecedented supply chain disruption outside of LCID’s control.” Morgan Stanley predicts that Lucid will not be able to make its 2030 production targets, or its goal of a 15% EBITDA margin over the long term.
- Finally, Lucid has an average price target of $37 among five firms with coverage. This represents a downside of 2% from current prices.
On the date of publication, Eddie Pan 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.
