RF Lafferty Upgrades Lucid Shares to Buy, Sees 81% Upside Potential

Written by Claudio Afonso | LinkedIn | X

RF Lafferty on Monday upgraded Lucid’s stock to “buy” from “hold” while setting a $4 price target after the electric vehicle maker reported third-quarter earnings results last week. Based on the most recent closing price, the company sees 81% upside potential for the California-headquartered manufacturer.

In a new research note, the analyst said the electric vehicle maker expects a period of “soft production” in the coming weeks. More details on the timing of delivery to customers will follow, as originally reported by The Fly.

The investment firm also cited Lucid’s “cost improvement, sustained volume growth and balance sheet strength” as reasons for the upgrade, adding that it expects the company’s cost structure to improve while maintaining steady revenue growth.

At the time of writing, the premium electric vehicle maker’s stock is trading nearly 9% higher at $2.40.

Stifel analyst Stephen Gengaro today lowered the stock’s price target to $3.50 (from $4.00) and maintained a Hold rating.

“Lucid delivered solid 3Q24 results, with revenue hitting the high end of management’s recently updated guidance and gross margins exceeding implied 2Q24 guidance,” the analyst noted.

“The company continues to place emphasis on improving its cost structure and financial position, underpinned by the recent $1.7 billion capital increase,” he added.

In the new note, Gengaro said that “Early feedback from Gravity continues to trend positively.” The start of production is planned for the next few weeks. Delivery begins with the high-end variant, the Lucid Gravity Grand Touring.

“In addition, Lucid has opened pre-orders for its flagship Gravity SUV in the US and initial feedback continues to be positive. “We maintain our Hold rating with a price target of $3.50 versus previously $4.00, largely due to dilution from the capital raise,” the analyst wrote.

The model range starts with the Grand Touring variant, which is available for pre-order now starting at $94,900. Fully loaded, the Gravity costs about $125,000. This high-end trim is expected to deliver 828 horsepower and an expected range of more than 440 miles, according to the electric vehicle maker.

Chinese EV brands should not be underestimated despite their lag in propulsion technology and the significant government support they receive.

Lucid Motors CEO Peter Rawlinson weighed in on Chinese competitors in a new interview published this weekend, reiterating that the companies are “certainly heavily subsidized by the central government.”

In the same interview, Lucid’s CEO criticized the quality of electric vehicles available in the United States, stating that many Americans found their experiences with electric vehicles disappointing.

Written by Claudio Afonso | LinkedIn | X