Institutional investors and professional traders rely on The Fly to keep up-to-the-second on breaking news in the electric vehicle and clean energy space, as well as which stocks in these sectors that the best analysts on Wall Street are saying to buy and sell.
From the hotly-debated high-flier Tesla (TSLA), Wall Street's newest darling Rivian (RIVN), traditional-stalwarts turned EV-upstarts GM (GM) and Ford (F) to the numerous SPAC-deal makers that have come public in this red-hot space, The Fly has you covered with "Charged," a weekly recap of the top stories and expert calls in the sector.
NO CATALYST FOR UNDERPERFORMANCE: Needham analyst Vikram Bagri upgraded Tesla to Hold from Underperform with no price target as he took over primary coverage of the stock, citing his belief that the stock is fairly priced and fact that he does not see a catalyst for underperformance in the near-term. Instead, he sees several potential catalysts that could drive the stock higher, including renewed federal tax credit eligibility under the Inflation Reduction Act, a potential credit rating upgrade to investment grade, the first deliveries of the Cybertruck in 2023, and expansion of the charging network. He has increased the firm's long-term estimates to reflect the potential benefit of these catalysts, Bagri noted.
FOCUS ON CHINA: Tesla Chair Robyn Denholm has defended the company's focus on China and its plans to further expand there, stating that reaching the company's goal of making 20M vehicles a year by 2030 will require manufacturing capabilities on every continent, Ben Westcott of Bloomberg reported. "Our view is the world is going to electric vehicles and to batteries that are lithium-ion based and we need to be in all of the major markets around the world," Denholm said, according to Bloomberg. Tesla recently opened factories in Berlin, Texas, Shanghai, and California. Denholm further added, "Producing vehicles on continents is important because, again, when you're setting a supply chain for the long term, you want those miles those cars travel before someone actually owns them to be the shortest possible, and that includes shipping and sea freight because all of those processes add to CO2 emission."
RIVIAN, MERCEDES-BENZ PARTNERSHIP: Mercedes-Benz Vans and Rivian announced the signing of a memorandum of understanding to initiate a strategic partnership. The partnership will enable the companies to cooperate on the production of electric vans. Subject to the parties entering into final binding agreements and to obtaining the relevant regulatory clearances, the companies intend to establish a new joint venture manufacturing company with the purpose of investing in, and operating, a factory in Europe to produce large electric vans for both Mercedes-Benz Vans and Rivian, starting in a few years. The target is to build an all-new electric-only production facility leveraging an existing Mercedes-Benz site in Central/Eastern Europe. They will aim to produce two large vans, one based on VAN.EA, MB Vans Electric Architecture, the electric-only platform of Mercedes-Benz Vans, and the other based on the second generation electric-van, Rivian Light Van platform. "Further options for increased synergies from the joint venture will also be explored," the companies said in a statement.
FULL VALUATION: Needham analyst Vikram Bagri initiated coverage of Rivian Automotive with a Hold rating. The analyst sees the company emerging as a leader in the EV truck race with their "innovative" designs that not only have the horsepower of trucks but luxury and speed attributes of high-end cars. Bagri further noted that Rivian's large order for commercial vehicles and a smaller SUV model on the horizon should drive continued market share gains, though he also sees valuation on the stock as full.
ANALYSTS DIVERGE ON LUCID: On Thursday, Citi analyst Itay Michaeli resumed coverage of Lucid Group (LCID) with a Buy rating and $28 price target. The analyst made no changes to his prior rating, price target or estimates. He's constructive on the Lucid story and its position in the electric vehicle market due its "demonstrated leading EV tech credentials with a best-in-class blend of range, performance, charging dynamics and price."
This came a day after Needham analyst Vikram Bagri started coverage of the stock with an Underperform rating as he sees profitability being "far out in the future." While calling the Lucid Air "the epitome of luxury in EV sedans" and noting that it is "attractively priced relative to its competition," Bagri also noted that production has been slow to ramp and said he believes Lucid will need more capital by the first quarter of 2023.
BUY FISKER: Needham analyst Vikram Bagri initiated coverage of Fisker (FSR) with a Buy rating and $12 price target. The company's SUVs entering the EV market offer cutting edge technology at an affordable price, the analyst told investors in a research note. Fisker also aims to achieve a dominant position without significant capital outlays through contract manufacturing agreements with the "largest and most reputed companies", Bagri addED, noting that its first SUV - The Ocean - will be assembled by the Magna (MGA), the 4th largest supplier to automotive industry.
ON THE SIDELINES: Wedbush analyst Daniel Ives initiated coverage of Sono Motors (SEV) with a Neutral rating and $4 price target. The analyst noted that Sono Group develops and manufactures solar technology to power electric vehicles while creating its own in-house solar EVs. As one of the first solar-powered electric vehicle brands, Sono expects to produce 257,000 units over the next seven years and its first flagship model, The Sion, has received nearly 20,000 reservations with an ASP of production/deliveries starting in the second half of 2023, Ives added.
SHORT-TERM BUY IDEA: On Tuesday, Deutsche Bank analyst Edison Yu placed a "Catalyst Call: Buy" on shares of XPeng (XPEV) as a short-term investment idea. The analyst expects a "temporary bounce back" in the shares with the official launch of the G9. The flagship SUV has already been shown off but pricing has not been disclosed yet, which is a key aspect leading up to the start of production next month, Yu told investors in a research note. Should pricing come in around 400,000 RMB or lower, the model should sell well at least for 2-3 quarters, alleviating some demand concerns, the analyst contended.
BULLISH ON CANOO: Stifel analyst J. Bruce Chan initiated coverage of Canoo (GOEV) with a Buy rating and $4 price target. The analyst is encouraged by Canoo's focus on "the most profitable automotive market segments," namely, compact SUVs, pick-up trucks and last-mile delivery, Chan told investors. Canoo is able to carry nearly 60% of its outstanding cost to its next model variant through its multi-purpose platform architecture and is attempting to capture value across the entire vehicle lifecycle, which Chan called "notably different from peers and entrenched OEMs.
OVER 55% UPSIDE: Piper Sandler analyst Kashy Harrison upgraded Array Technologies (ARRY) to Overweight from Neutral with a price target of $28, up from $20. The company's "strong order book" creates the potential for an attractive 2023 revenue and EBITDA outlook, Harrison told investors in a research note. The analyst views Array as a beneficiary of the Inflation Reduction Act's domestic content requirements along with the manufacturing credits. He also likes the new CEO's focus on transitioning toward free cash flow generation. Harrison acknowledges near-term risks associated with the Uyghur Forced Labor Prevention Act but sees the potential for a more pronounced 2023 market recovery. The shares offer greater than 55% upside, according to the analyst.
TAILWINDS IN U.S., EUROPE: Northland analyst Donovan Schafer initiated coverage of ReneSola (SOL) with an Outperform rating and $8 price target, citing what he sees as the company's "unique exposure" to Eastern European solar markets and Inflation Reduction Act tailwinds for ReneSola's community solar pipeline in the U.S. Both regional tailwinds play into ReneSola's strategic shift to more "Notice to Proceed," or NTP, sales versus "Commencement of Operations Date," or COD, sales, as this margin-enhancing shift requires a larger project pipeline and more buyers to support an accelerated turnover of project assets, Schafer told investors.
