Shares of Lucid Group (NASDAQ: LCID) plunged under $3 Monday, and have been down by 10% as of two:30 p.m. ET. A big analyst downgrade seems to have triggered the sell-off.
Why is that this analyst so bearish about Lucid inventory?
Redburn Atlantic analyst Tobias Beith downgraded Lucid inventory to promote from impartial, slashing his worth goal from $3.50 a share to solely $1.13 per share. That new goal is 63% under the electrical car (EV) maker’s closing worth Friday.
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Though Beith believes it will not be simple for Lucid’s rivals to “replicate the effectivity” of its electrical vehicles earlier than 2030, the corporate would require big quantities of money to scale up manufacturing of the brand new mid-size platform it expects to launch subsequent 12 months. The analyst expects considerably greater money outflows, to the tune of billions of {dollars}, for Lucid between 2025 and 2030.
Lucid’s lack of producing scale and its excessive car prices are the opposite causes Beith is bearish in regards to the EV inventory.
Be careful for Lucid’s earnings
Lucid will launch its fourth-quarter and 2024 numbers after the market shut Tuesday. Earlier this 12 months, Lucid mentioned it produced 3,386 autos and delivered 3,099 in This autumn, up considerably from the third quarter. Nonetheless, it additionally reported an enormous loss in Q3, primarily due to write-downs and different non-operating prices.
Lucid’s growth will depend largely on its Gravity SUV — the corporate delivered the primary ones to clients in December. Its high line ought to develop because the Gravity begins contributing meaningfully to gross sales, however greater losses and a rising money burn fee stay regarding. The numbers Lucid experiences Tuesday and administration’s outlook for 2025 would be the key drivers of its inventory worth, in no matter path it heads.
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Neha Chamaria has no place in any of the shares talked about. The Motley Idiot has no place in any of the shares talked about. The Motley Idiot has a disclosure policy.
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