Lucid Picks Up New Buy Rating. Stock Can Rise 60%.

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Shares of luxury electric vehicle maker

Lucid

is rising Tuesday after a new bullish call from the Street.

Cantor Fitzgerald analyst Andres Sheppard launched coverage of

Lucid

(ticker: LCID) stock with a Buy rating and $23 price target for shares. Lucid stock closed Monday at $14.06.

Sheppard believes the company’s investments in battery technology and range will be a competitive advantage.

For instance, Lucid’s first product—named Air—can get up to 500-plus miles on one charge. That’s industry leading and not only due to a larger battery pack. (More batteries added extend range, but also add weight and cost.) Some of the range comes down to design of power electronics.

“This is achieved by the company’s vertically integrated manufacturing approach and its miniaturized drivetrain components, which also result in increased storage capacity,” wrote the analyst in his launch report. “Lucid’s vehicles also come with an ultra-fast and bidirectional ‘wunderbox’ boost charge technology system of 900 [volts], which is capable to charge 300 miles in [about] 22 minutes.”

The newest EVs can take more juice faster, cutting charge times dramatically. Typical EVs have a per-charge range of about 300 miles, so Lucid’s technology can, essentially, offer close to a full charge in 20 minutes.

Eventually, Sheppard sees Lucid capturing 2% global EV shares by 2026. Based on various industry projections for EV penetration of new car sales, that might amount to 400,000 to 500,000 vehicles delivered. The company expects to deliver roughly 6,500 units in 2022.

Lucid shares were up about 5.3% in premarket trading after the bullish call. The

S&P 500
and

Dow Jones Industrial Average
were up 1% and 0.8%, respectively.

The new Buy ups the number of analysts covering Lucid stock to nine, according to Bloomberg. Five, or 56%, rate the shares Buy. The average Buy-rating ratio for stock in the S&P is about 58%.

The average analyst price target is about $24 a share, close to Sheppard’s mark.

Coming into Tuesday trading, Lucid shares are down about 63% on the year. Most car stocks are off as inflation raises costs and higher interest rates threaten demand for new cars. Auto and auto parts stocks in the

Russell 3000 Index
are down about 27% year to date on average.

A guidance cut coming from Lucid Back in August hit investor sentiment too. In the second quarter earnings release, Lucid cut production guidance in half to about 6,500 vehicles from about 13,000 vehicles.

Write to Al Root at [email protected]