QuantumScape (NYSE:QS) stock is feeling the heat on Thursday after the company’s shares were hit with a weak price target.
Wolfe Research analyst Rod Lache is behind this news, as he set a $2 price target for QS stock. That represents a potential 72.7% drop from the stock’s closing price yesterday. It also represents a drop from the analyst consensus price target of $5 for shares.
To go with that lackluster price target, Lache also downgraded QS stock from “peer perform” to an “underperform” rating. To put that in perspective, the analyst consensus rating for QS shares is a “hold” based on five analyst opinions.
What’s Behind the QS Stock Downgrade Today?
The Wolfe Research analyst has a few concerns about QS stock and how it will treat investors. Among these are questions about the company’s long path to commercialization, as well as the speculative nature of its battery technology breakthroughs.
QuantumScape is developing solid-state lithium batteries for electric vehicles (EV). It’s banking on new a new anode-less cell design that it claims offers “high energy density while lowering material costs and simplifying manufacturing.” However, the company only recently sent a test batch of its batteries to EV makers late last year.
QS stock is down 9.2% as of Thursday morning. This comes as around 3 million shares change hands. This is closing in on its daily average trading volume of about 4.3 million shares.
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On the date of publication, William White 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.