Wednesday, February 1, 2023
HomeMarketCall to 'Sell Fisker, Lucid and Buy Rivian, Tesla,' as EV Upheaval...

Call to ‘Sell Fisker, Lucid and Buy Rivian, Tesla,’ as EV Upheaval Looms

Deliveries of Fisker’s Ocean will ramp up in 2023. Morgan Stanley warns investors to avoid the stock.

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Courtesy of Fisker

Tesla
‘s coming price cuts are going to make it very difficult for other electric vehicle startups—which means investors will have to be choosier when selecting stock in the sector.

The Tesla (ticker: TSLA) cuts are evidence that EVs are passing from acute under-supply to potential over-supply, according to
Morgan Stanley
analyst Adam Jonas. He sees the sector entering a “share-out phase” and recommends investors hold less exposure to EV stocks.

The ones he doesn’t like and recommends investors avoid are
Fisker
(FSR) and
Lucid
(LCID) shares. Wednesday, Jonas downgraded
Fisker
stock to Sell from Hold. He slashed his price target to $4 a share from $8. Jonas also cut his
Lucid
price target in half—to $5 from $10 a share. He maintained his Sell rating on Lucid shares.

Fisker stock is down 6% in premarket trading. Lucid shares are down 2%.
S&P 500
and
Dow Jones Industrial Average
futures are down 0.7% and 0.5%, respectively.

Jonas still recommends
Rivian Automotive
(RIVN) stock, though he cut his price target for shares to $28 from $55 on Wednesday as well. Rivian stock is down 2.3% in premarket trading.

Tesla is Jonas’s top EV pick. His price target for shares was trimmed to $220 from $250 a share on Wednesday. Tesla stock is down 1.3% in premarket trading.
Nasdaq Composite
futures are down 1.4%.

Overall, 64% of analysts covering Tesla stock rate shares Buy. The average Buy-rating ratio for stocks in the S&P 500 is about 58%. The average analyst price target is about $209 a share, a little lower than Jonas’s mark.

About 60% of analysts covering Rivian stock rates the shares Buy. The average analyst price target is about $38 a share.

For Fisker and Lucid, about 45% of analysts covering both stocks rate them Buy. The average analyst price targets for both shares is also about $13.

Fisker and Lucid shares are down about 36% and 76%, respectively, over the past 12 months. Fisker stock has held up better because it isn’t as richly valued as other startup stocks. Fisker’s market capitalization is about $2.3 billion. Lucid’s is about $14.5 billion even after the steep decline.

Rivian shares are are down almost 70% over the past 12 months. Tesla stock is off about 53%.

Rivian’s market cap is about $16.6 billion. Tesla is the world’s most valuable automotive company with a market cap of about $450 billion.

Write to Al Root at allen.root@dowjones.com

Credit: marketwatch.com

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