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- Bank of America began hedging Lucid Motors on Wednesday with a “buy” rating and a $ 30 price target.
- Analysts led by John Murphy compared the new public company to Tesla and Ferrari.
- Lucid has fallen nearly 25% since it went public through a SPAC merger with Churchill Capital in July.
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In the vast universe of electric vehicle startups, Lucid Motors is one of the most legitimate.
According to Bank of America, it began hedging the electric vehicle maker Wednesday with a “buy” rating and a $ 30 target price. This is a price jump of 58.3% based on the closing of Lucid on Tuesday.
Analysts led by John Murphy compared the new public company to Tesla and Ferrari, noting that Lucid’s business model “pulls a page” from the books of the two established carmakers.
“We are initiating Lucid (LCID) coverage with a buy rating and $ 30 PO, based on an EV / sales of ~ 3.0x and EV / EBITDA of ~ 37x according to our 2025 estimates,” analysts said. . “They are a premium on TSLA’s first trading multiples and on average EV OEM SPAC pair multiples, but still a notable discount on TSLA’s recent trading multiples (base five years onwards), which reflect our vision of LCID as one of the most legitimate EV car manufacturers to start. “
Lucid supplies components for Formula E, the motor racing championship for electric cars. This part of its business model is similar to Ferrari, which supplies parts for Formula 1, BofA said. Meanwhile, Lucid’s business strategy also reflects that of Tesla, analysts said, as it launches the first luxury-level vehicles before expanding into the mass market.
Lucid jumped 5.6% to intraday highs of $ 20.02 on Wednesday. Shares have fallen nearly 25% since Lucid went public through a SPAC merger with Churchill Capital in July.