Analysts astatine B. of A. Securities kept a affirmative presumption connected the U.S. car industry, but downgraded the banal of 2 newcomers, Lordstown Motors Corp. and Fisker Inc., saying that contention among car makers is “fierce.”
The analysts, led by John Murphy, downgraded Lordstown RIDE, -3.36% shares to the equivalent of sell, and Fisker FSR, -6.74% shares to the equivalent of clasp successful a enactment Thursday. Avis Budget Group Inc. CAR, +9.02% and parts shaper Dana Inc. DAN, +0.04% got upgrades to buy.
About 80% of B. of A.’s car sum is rated bargain oregon hold, the analysts said, “reflecting our constructive stance broadly.” The analysts earlier this week initiated sum of Lucid Group Inc. LCID, +6.38% with a bargain rating.
Lordstown Motors got a downgrade due to the fact that the Ohio-based EV shaper is “just 1 of galore participants successful the automotive manufacture improvement towards electrification,” the analysts said. Moreover, it is “also 1 of the little morganatic on the beingness of start-up electrical conveyance automakers.”
Lordstown got a caller main enforcement past month, who promised “absolute absorption connected execution” and reaffirmed its extremity to merchantability its electrical pickup truck, the Endurance, by adjacent year.
Earlier successful the year, however, Lordstown added a “going concern” informing to regulatory filings, pursuing the departure of cardinal executives and amid doubts implicit its bid book, with the institution aboriginal clarifying that the orders it had were not binding.
The Justice Department reportedly has launched a probe into the company’s dealings and the electric-truck shaper has disclosed an SEC inquiry.
Lordstown “ranked reasonably good successful our autotech entrant/SPAC analysis, but a bid of operational and fiscal hurdles since are present plaguing the institution arsenic contention is importantly heating up,” the B. of A. analysts said successful their note.
Shares of Lordstown person mislaid astir 67% this year, contrasting with gains of astir 18% for the S&P 500 index. SPX, -0.41%
For Fisker, the presumption is that the luxury EV shaper “is 1 of the much morganatic among the beingness of start-up electrical conveyance automakers,” acknowledgment to its narration with declaration shaper Magna International Inc. MGA, -4.25%, “critical” to Fisker’s commercialization. Competition, however, “is becoming incredibly fierce.”
Fisker is contracting car parts, electronics and different makers successful an effort to diversify its production, a strategy some connected Wall Street person dubbed a bid to go the “Apple of autos,” focusing connected plan and user interfaces.
It announced a woody with electronics powerhouse Foxconn Technology Group successful February, and plans to person 4 vehicles successful accumulation by 2025, 3 with Magna and 1 with Foxconn.
Fisker shares person mislaid 16% truthful acold this year.
For autos successful general, a pandemic-induced “supply-chain crunch” continues to unit accumulation downtimes crossed the industry, the analysts said. The constraints, however, are creating further pent-up demand, which would pb with a multiyear recovery, they said.
In the adjacent 3 to six months, however, car stocks are expected to stay volatile, they said. “As accumulation disruption is apt to astir negatively interaction the supplier nexus of the worth chain, it is that conception of our sum wherever we stay comparatively astir cautious.”
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