Here Is What Wall Street Experts Are Saying About These EV Names Ahead Of Results
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Several electric vehicle makers are expected to report quarterly results in the upcoming weeks. Fisker (FSR) and Nikola (NKLA) are scheduled to report quarterly results on August 4, while Lucid (LCID) is expected to report earnings on August 7. Both Rivian (RIVN) and Li Auto (LI) will hold their earnings calls on August 8, and Xpeng (XPEV) on August 18. Nio (NIO) and Lordstown (RIDE) are also expected to announce results soon. What to watch for:
CYBERTRUCK COMPETITION: On Tuesday, Cantor Fitzgerald downgraded Rivian Automotive to Neutral from Overweight with a price target of $29, up from $27. The analyst cited valuation for the downgrade with the shares up 50% year-to-date. Rivian is also facing increased competition from Tesla's (TSLA) Cybertruck, which has over 1.2M reservations, as well as from General Motors (GM) and Ford Motor (F), the firm told investors in a research note. Cantor views Rivian shares as "properly valued" and has become "more conservative" in the short term.
More bullish on the name, Needham raised the firm's price target on Rivian Automotive to $31 from $28 and kept a Buy rating on the shares along with its Conviction List designation ahead of its Q2 earnings. The company's competitive advantages are "shining brighter," with Rivian emerging as a demand creator when considering that the majority of its buyers have never previously purchased a pickup truck, the firm told investors in a research note. As a pure-play EV company, Rivian is following Tesla's vertically integrated path, but sidestepping the more controversial and harder to value FSD/Robotaxi angle, Needham adds.
TARGET CHANGE AHEAD OF EARNINGS: R.F. Lafferty lowered the firm's price target on Fisker to $10 from $12, while keeping a Buy rating on the shares ahead of the company reporting Q2 earnings on the morning of August 4. The firm, which notes that Fisker began its first deliveries into the European market in May and its first deliveries to the U.S. in mid-June, expects the company to report a sequential increase in revenues from its initial deliveries of the Fisker Ocean. The firm's 2024 EBITDA estimate of $197M is lower than its prior forecast of $213M to reflect slower production and deliveries.
Meanwhile, DA Davidson raised the firm's price target on Nikola to $3 from $1, but kept a Neutral rating on the shares ahead of its Q2 results. The company's deliveries were "no mystery" in what has been a "busy quarter" as Nikola has also announced a reduction in headcount and other cost cuts that are expected to reduce annualized cash usage below $400M in 2024, DA Davidson tells investors in a research note. The firm adds however that while there is "a lot to like," Nikola trades at enterprise value to sales multiple of 2.5-times - in line with its peers.
On Wednesday, Citi raised the firm's price target on XPeng to $15 from $6.28 but maintained a Sell rating on the shares. Citi also increased estimates to reflect the better-than-expected sales performance of the new model G6, which the firm notes also boosted overall customer traffic and sales volume. To factor in VW partnership, Citi changed its valuation methodology for the shares.
ON THE SIDELINES: Citi's target raised followed two rating changes earlier this week for Xpeng. While JPMorgan got more bullish on the name and upgraded the stock to Neutral, UBS downgraded Xpeng but to a Neutral rating as well.
JPMorgan upgraded XPeng to Neutral from Underweight with an $18 price target after the shares rallied on the unexpected announcement of Volkswagen's (VWAGY) $700M investment and strategic partnership between the two companies. The firm believes XPeng's long-term equity story "has now fundamentally changed" and will outweigh investor concerns on its near-term margin shortfall and financial stress. However, JPMorgan believes it remains too early to call for an outright Overweight at this stage considering business execution and the broader industry headwinds pertaining to competition.
Meanwhile, UBS downgraded XPeng to Neutral from Buy with a $23 price target, citing valuation following the stock's 192% rally since November 2022. While positive on the Volkswagen investment and collaboration, the firm believes XPeng's near-term upside catalysts have been priced in. The company remains "vulnerable in a fiercely competitive market" and needs to recover its profitability, UBS tells investors in a research note.
BofA resumed coverage of Lucid Group last month with a Neutral rating and $8 price target. The firm reduced its Q2 and 2023 EBIT estimates after Q2 deliveries came in below its forecast and although it did not make meaningful adjustments for 2024 and later, BofA noted that it plans to revisit this following additional commentary during earnings reporting. The firm's model now reflects the $3B share issuance announced on May 31, which it said was in-line with BofA expectations.
Citi also resumed coverage of Lucid Group with a Neutral rating and $8 price target. The firm remains constructive on Lucid's leading technology position, anchored by a miles/kWh advantage estimated to be worth $4-5k/vehicle. With the cash/liquidity runway having been extended, the focus shifts back to near-term demand for the Lucid Air and the company's gross margin progression, which were challenged in Q1, Citi adds. The ideal outcome would see improvement on both fronts, followed by the unveiling of the Gravity SUV. Given the stock's relative valuation, recent EV price discounts, and the time gap until Gravity SOP, a bullish stance on the stock requires some conviction on the H2 Air volume ramp and margin progression, the firm says.
RESEARCH TACTICAL IDEA: Morgan Stanley named Nio as a "Research Tactical Idea" on Tuesday given the belief that the share price will rise in absolute terms over the next 15 days after the company reported "record-setting deliveries" of 20,462 units in July. The firm keeps an Overweight rating and $18.70 price target on Nio shares.
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