Lucid Group (NASDAQ: LCID) is compared to EV leader Tesla and the legendary Italian performance car company Ferrari of Bank of America, which launched coverage of the electric car company’s shares today. Bank of America’s coverage predicts that the Lucid share will jump by 50% in the coming years, as the company has high expectations from analysts.
Lucid, led by CEO and CTO Peter Rawlinson, a former Tesla employee, is set to launch his first vehicle, the Air, later this year. After the company was listed earlier in 2021 following a merger with Churchill Capital Corp. IV, analysts have begun to break down the company’s potential in a burgeoning EV market. Bank of America said the company is undoubtedly a reputable, competitive threat to other companies like Tesla, Rivian and Ford.
Bank of America said in its note to investors that Lucid’s “innovative technology, attractive product, compelling brand, clean sheet manufacturing process and impressive management” are key factors in the company’s quest to become number one in the industry. With remarkable and experienced executives, a quality product with Air Dream Edition and a large production facility in Casa Grande, Arizona, Lucid has all the ingredients for success. The question is whether the company can keep up with the production as it has lots of benefits.
Analysts at Bank of America have a bullish view of Lucid based on an EV / sales ratio of around 3.0x and an EV / EBITDA multiple of around 37x for the 2025 estimate. Analyst John Murphy said, “These are a premium to TSLA’s early trading multiples and to average multiples from EV OEM SPAC peers, but still a remarkable discount on TSLA’s latest trading multiples (five years ahead), reflecting our view of LCID as one of the most legitimate start-up EV car manufacturers. ”The analyst also called Lucid” Tesla / Ferrari of new car manufacturers “and declared the company” one of the most legitimate start-up EV manufacturers. “
Lucid announces preview of Air production in late September
Lucid got its first coverage launched late last week by CFRA analyst Garrett Nelson. In his note, Nelson said that Lucid has plenty of competitive advantages that stem from its premium specifications on the upcoming luxury EV models, strong balance and management team and brand new factory in Arizona. Nelson also added that “LCID seems to mark all the boxes in a new user in the industry with endurance.” However, the CFRA is also aware of the hard road it may encounter based on Tesla’s “formidable competitive mound”, which is likely to slow down their expected momentum.
Lucid has a $ 30 price target from Bank of America’s Murphy. John Murphy is ranked 1,070 out of 7,641 analysts and has a success rate of 62% and an average return of 12.1%, TipRanks say.
Disclosure: Joey Klender is not an LCID shareholder and has no plans to start any positions.