The shares of Lucid Group Inc. received a buy recommendation from analysts at Bank of America, who said on Wednesday that Lucid is the “Tesla/Ferrari” of electric vehicles and is capitalizing on lessons learned by the other two luxury automakers.
The analysts, led by John Murphy, praised Lucid’s LCID,
management team, its “key competitive advantages”, such as its Formula E technology, and its “interesting/attractive” product, the Lucid Air ultra-luxury sedan.
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“While this doesn’t mean completely avoiding the hurdles that many EV startups have faced from concept to commercialization, we attribute much more credibility to[Lucid’s]success in this endeavor,” the analysts said.
Lucid shares rose more than 4% on Wednesday, wiping out some of their losses from earlier in the week, including a decline on Tuesday after analysts at Morgan Stanley began covering the stock with the equivalent of a sell recommendation.
Morgan Stanley said Lucid was a “super premium” electric vehicle manufacturer that might be able to scale its production, but there’s just too much competition to get too excited about the stock for now.
Lucid shares began trading on the Nasdaq in July after the company’s merger with a blank check company was approved on a second attempt a few days earlier. Lucid said at the time it had $4.4 billion in funding and would be able to “significantly accelerate” its plan to deliver “the best EVs in the world.”
The Newark, California-based company hopes to begin sales of the Lucid Air, built at Lucid’s Arizona plant, in the second half of this year. The car is expected to sell for approximately $77,000.
B. of A. analysts set a $30 price target on Lucid, representing a 52% increase from Wednesday’s prices.
Lucid shares have nearly doubled this year, compared to gains of about 19% for the S&P 500 index. SPX,