Brokerage firm Stifel recently lowered the price target on electric vehicle maker Lucid Group Inc (LCID) to $4 from $5 while maintaining its “hold” rating. Despite the downward outlook for EV sales in the near term, Stifel sees several positives for Lucid.
One positive aspect highlighted by the brokerage is the availability of a lower-priced rear-wheel drive version of Lucid’s flagship Lucid Air sedan, starting at $69,900. Additionally, Lucid’s focus on controlling costs and its best-in-class technology with potential for additional licensing agreements are seen as strengths for the company. Furthermore, Lucid is planning to start production of its Gravity SUV later this year.
However, Stifel is hesitant to change its rating to a buy due in part to concerns about the company’s cash burn. In the fourth quarter, Lucid reported revenue of $157.2 million, which missed consensus estimates, and a loss of 29 cents per share. Total costs and expenses for the quarter amounted to $894 million. Despite these challenges, Lucid is aiming to produce 9,000 vehicles this year, an increase from the 8,428 vehicles produced in 2023.
On Monday, Lucid shares closed up 4.3% at $3.15 and rose 1.59% in Tuesday’s premarket trading. However, the stock is down 24.1% year-to-date.
In conclusion, while Lucid faces some hurdles, such as cash burn and missed revenue estimates, the company’s focus on innovation, cost control, and upcoming product releases are seen as positive factors by Stifel and other analysts. Investors will be watching closely to see how Lucid navigates these challenges and capitalizes on its strengths in the competitive EV market.
