© Reuters. BoA resumes Lucid (LCID) at Buy: most attractive EV startup ‘among the universe’
By Michael Elkins
Bank of America global research resumed their coverage of Lucid Group (NASDAQ:) with a Buy rating and $21.00 price target after the company reported their . The electric car company reported a non-GAAP adjusted EBITDA loss of $(553)mm. They ended the 3Q with $3.9bn of cash, cash equivalents, and investments on its balance sheet, down from $4.6bn at the end of the 2Q due to a cash burn of $(860)mm in the quarter.
The analysts wrote in a note, “Our Buy rating is predicated on our view that it is one of the most attractive among the universe of start-up electric vehicle (EV) automakers and also a relative competitive threat to the universe of incumbent automakers. We believe LCID currently has more pieces of the puzzle in place and in process than most of its peers which, steered by a management team with impressive experience, should push the company more successfully from concept to commercialization.”
The company reaffirmed its 2022 production outlook of 6-7k vehicles, which was lowered following the company’s 2Q results due to supply chain and logistics challenges. Lucid plans to open reservations for their SUV (Project Gravity) in early 2023 and expects production to commence in 2024. In addition, the company expects to begin Lucid Air Sapphire production in 1H23.
LCID also announced that it agreed to sell up to $600mm shares of common stock as part of an “at-the-market” program. Additionally, it entered into an agreement with its majority stockholder (Ayar Third Investment Company), which agreed to buy up to $915mm shares of its common stock. LCID primarily plans to use the net proceeds from these transactions for capital expenditures and working capital.
Shares of LCID are down 1.33% in mid-day trading on Thursday.
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