2 Electric Vehicle Stocks Recently Downgraded By Goldman Sachs

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A semiconductor chip shortage and overvaluation concerns have been taking a toll on electric vehicle (EV) stocks of late. While the EV industry’s long-term prospects look bright, many companies in the sector with weak fundamentals are expected to continue retreating in the near term. Goldman Sachs recently downgraded EV manufacturers Fisker (FSR) and Lordstown Motors (RIDE). 

Electric vehicle (EV) stocks saw an astonishing rally last year on investors’ exuberance over the industry’s huge growth prospects. Worldwide governmental initiatives to shift to zero-emission transport as part of the broader goal to build a sustainable energy-based future motivated investor to bet on EV stocks, in some cases irrespective of their fundamentals. In fact, the industry’s potential growth has caused it to now be, arguably, overcrowded with new entrants.

Nevertheless, optimism about the industry and the consequent rally in EV stock prices have pushed the shares of most industry participants to valuations that often don’t justify their current fundamentals and growth prospects. Furthermore, a semiconductor shortage is causing operational disruptions at many established EV manufacturers. Investors also expect a dip in EV demand with an anticipated decline in crude oil prices in the coming quarters.

Consequently,  many EV players that lack the fundamental strength to survive these headwinds are expected lose value.  Goldman Sachs recently downgraded  Fisker Inc (FSR - Get Rating) and Lordstown Motors Corp (RIDE - Get Rating). So, we think it could be wise to stay away from these stocks now.

Fisker Inc. (FSR - Get Rating)

Founded in 2016, FSR focuses on the design, development, manufacture, and sale of electric vehicles. In March, FSR signed a memorandum of understanding with Crédit Agricole Consumer Finance, part of the Crédit Agricole Group—one of the largest banking groups in Europe—for the  supply of Fisker Ocean SUVs. The Fisker Ocean should deliver latest generation technology and performance to the bank’s employees, while reinforcing its commitment to a low-carbon fleet.

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Rebecca Duncan 1 week ago Member's comment

This is old new trying once again to overshadow good news. SAD that Goldman is so short in the companies and hoping they don't get caught is a terrible prediction.