In another sign that Wall Street is keeping its sights firmly on electric car makers and adjacent companies, Morgan Stanley began hedging shares in Fisker Inc. and several others.
Fisker FSR shares,
The electric vehicle maker, which went public in October through a blank check company, earned a buy rating, as did QuantumScape Corp. QS shares,
It also went public last year through a SPAC and caused a sensation in December with what it described as a breakthrough in solid-state battery technology.
As more automakers and companies like Apple Inc., which has reportedly been developing an electric car for years, work to secure a nationwide supply of solid-state batteries, QuantumScape “may be very well positioned,” said the analysts, led by Adam Jonas, said in their note on Friday.
If the technology, which has been praised by many, works at scale, “we see the potential for (QuantumScape) to become one of the largest companies under our umbrella,” he said.
As for Fisker, it stands out “as one of the business models with the least risks and with the most strategic support,” Morgan Stanley said. Investors may be underestimating Fisker’s path to commercialization with the deal with auto parts maker Magna International Inc. MGA,
is inked in January.
Analysts set a price target of $ 70 for QuantumScape and $ 27 for Fisker, representing an increase of 30% and 40%, respectively, from Friday’s prices.
Morgan Stanley founded the electric truck maker Lordstown Motors Corp. RIDE,
in its sell equivalent, saying the company faces “an onslaught of new competition in EV trucks, from startups to legacy OEMs with much greater scale and distribution advantages.” He set his price target at Lordstown at $ 18, which is about 35% down from Friday’s prices.
Romeo Power Inc. RMO Battery Starter,
it also started on the equivalent of a sell qualification. The company “is in the middle / downstream part of the battery value chain and does not appear to be involved in vehicle design or cellular technology,” the analysts said.
Much of its contracted revenue comes from Nikola Corp. NKLA,
and Canada-based Lion Electric Co, and the stock performance is tied to how quickly Romeo can convert orders and maintain margins in the face of “intense competition.” Analysts had a $ 12 price target on Romeo, which is around 30% down.