Shares of Lucid (NASDAQ:LCID) closed down 5.4% today, trading near their 2022 low. Even worse, shares of LCID stock are down more than 25% over the past five trading days.
During 2021, LCID stock returned a staggering 280% as electric vehicle (EV) stocks entered the spotlight. In addition, Lucid has not reported any material news this year that would explain its price decline. So, why are shares down so much?
Tesla Reports Supply Chain Woes
Lucid’s recent price decline may be attributed to Tesla’s (NASDAQ:TSLA) fourth-quarter earnings. While Tesla reported sales that were up an impressive 65% year over year, the company also warned of “equipment capacity, operational efficiency and … supply chain” issues. TSLA stock dropped more than 10% the following day.
Tesla is the undisputed leader in the EV industry. It only makes sense that if Tesla is having issues, then those issues could translate to Lucid as well. Furthermore, Tesla reported that it was experiencing “parts constraints,” which factored into the EV maker announcing it would not release any new vehicles this year. This constraint could hurt Lucid as well. However, all will be known when Lucid reports earnings for the fourth quarter. Lucid has not confirmed an earnings date yet, although Nasdaq estimates that the date will fall on Feb. 21.
With the potential supply chain constraints in mind, investors are starting to doubt whether Lucid will be able to repeat last year’s performance. Let’s take a look at Wall Street’s LCID stock price predictions.
LCID Stock Price Predictions
- Citi has a price target of $57. Analyst Itay Michaeli is bullish on Lucid for three reasons: its leading EV technology credentials, a fast speed t0 market, and “advanced and comprehensive sensor suite leveraged with OTA [over-the-air] capabilities.” Michaeli adds that he sees several catalysts for the coming year, including a manufacturing ramp, Air launch timing updates, and financial results.
- Guggenheim has a price target of $38. Analyst Ali Faghri gives Lucid a “premium multiple” due to its “best-in-class EV technology,” vertical integration business model and its status as a powertrain supplier. Faghri adds that in the best-case scenario, shares of LCID stock could reach $83. In the worst-case scenario, Lucid could fall to as low as $12.
- Morgan Stanley has a price target of $16. Lucid’s Q3 delivery figure impressed analyst Adam Jonas. Jonas estimates that Lucid will receive 15,000 reservations for 2022, which is lower than Lucid’s internal estimate of 20,000. For 2030, Jonas believes Lucid will receive 400,000 reservations, which is again lower than Lucid’s estimate of 500,000. Jonas highlights several company risks, such as scaling production, factory costs and supply chain issues. Finally, the analyst adds that he sees better risk-reward balances in other EV names, such as Tesla, General Motors (NYSE:GM) and Ferrari (NYSE:RACE).
On the date of publication, Eddie Pan did not hold (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.