A credit downgrade lowers electric vehicle startup stocks
But upgrading from the same broker does not help Lucid peers
On Friday, James Picariello, an analyst at Exane BNP Paribas, downgraded Lucid stock (stock ticker: LCID) to sell from hold. Target price went to $5 from $6.50. He also upgraded shares of Rivian Corporation (RIVN) to Buy from Hold, and raised the price target to $30 from $24.
Exane refused to send Barron A copy of the report.
Lucid stock took a hit, down 3% at midday at $6.58 a share. Rivian stock also fell, down 1.3% in the red and $21.62, while
Standard & Poor’s 500
are of 0.3% and 0.7%, respectively.
Piccariello’s views seem to line up with the rest of the street. Only 31% of analysts covering Lucid stock have Buy ratings. The average buy rating for stocks in the S&P 500 is about 55%. Downgrading to Sell from Hold does not change the percentage of Buy rating. However, it changes the Sell Rating percentage. About 23% of analysts cover Lucid’s share price shares when selling. The average sell rating for stocks in the S&P 500 is about 6%. The average analyst price target is about $775 per share, up about 18% from recent trading levels.
About 58% of analysts who cover Rivian stock have Buy ratings. The average analyst price target is about $27.50 per share, about 25% higher than recent levels.
Recent production and delivery performance may be reasons for ratings changes.
Lucid delivered 1,404 vehicles in the second quarter of 2023, down from 1,406 deliveries in the first quarter. The company plans to produce 10,000 units in 2023.
Rivian delivered 12,640 vehicles in the second quarter, up from 7,946 in the first quarter. The company plans to produce more than 50,000 units in 2023.
Despite these differences, Lucid and Rivian are roughly the same amounts. Lucid’s market capitalization, measured by equity capitalization, debt minus available cash, is about $12 billion. Rivian $13 billion.
At Picariello prices, Rivian is worth about $18 billion and Lucid is about $9 billion.
Write to Al Root at firstname.lastname@example.org