Written by Cláudio Afonso | LinkedIn | X
RBC Capital Markets analyst Tom Narayan published a new research note on Tuesday, lowering the price target for electric vehicle maker Lucid Motors to $2.00 from $3.00.
While maintaining a “Sector Perform” rating, the firm’s revised model now accounts for significantly lower earnings estimates attributed to potential new deals involving the licensing of Lucid’s technology to other carmakers.
In mid-2023, the EV maker announced that it would provide the British brand Aston Martin with technology, including a rear drive unit with twin motors, battery modules, and software for system integration.
At the time, Lucid’s CEO stated that it was just the beginning, as the company continued — and still continues — to pursue new licensing deals with carmakers.
“In this note, we update our model for Q3 earnings and lower our PT [price target] to $2 from $3. Most of this comes from a lower licensing value/share until we see evidence of deals being struck. ” Narayan wrote.
Despite the revised outlook, Narayan praised the company’s management for its cost-control efforts and expressed interest in upcoming demand figures for the Gravity SUV. “All that said, we do applaud mgmt [management] in cost control and eagerly await demand figures on the Gravity SUV.” he added.
Lucid shares rose 6.47% on Tuesday, closing at $2.14. The new price target implies a 6.5% downside from the current stock price, compared to a 40% upside potential implied by the previous $3.00 target.
Lucid began earlier this month, accepting U.S. orders for the higher trim of its second model, the Gravity SUV, which starts at $94,500. The lower-priced $80,000 trim is expected to arrive in late 2025.
Last week, CEO Peter Rawlinson announced that production of the model is set to begin “imminently” at the company’s manufacturing plant in Casa Grande, Arizona.
Lucid shares hit a record low of $1.93 on Friday, extending the stock’s year-to-date losses to approximately 53%.
The company’s chief executive commented on Chinese competitors in a new interview released last week reiterating that the companies are “certainly heavily subsidized by central governments.”
In the same interview, Lucid’s CEO criticized the quality of electric vehicles available in the U.S., stating that many Americans have found their experiences with EVs underwhelming.
Written by Cláudio Afonso | LinkedIn | X
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