Has BofA Securtities Picked a Winner Among 9 Automaker Stocks?

Ferrari N.V. (NYSE: RACE) is also Buy-rated at BofA. The stock’s price objective of $300 was unchanged from its level set in January. At a recent price of $218.64, the upside potential to BofA’s price objective is 37.2%.

Calling Ferrari a “unique asset,” BofA’s analysts cite the company’s “resilient financial performance, significant intangible brand value, and a true luxury status” as their investment thesis. The price objective represents 25 times the estimated 2023 enterprise value to EBITDA (EV/EBITDA) multiple and “[reflects] ongoing volume, revenue, and earnings growth through 2023E+.”

Ferrari’s annual dividend payment of $1.55 represents a yield of 0.62%. The stock’s total return over the past year is 5.4%.

None of the six EV stocks pays an annual dividend and only one has posted a positive total return over the past 12 months.

Tesla Inc. (NASDAQ: TSLA) has a Neutral rating from BofA’s analysts. The stock’s price objective was raised from $1,100 to $1,300, implying an upside potential of 25.7% based on a recent price of $1,034.07. The price objective implies a four-times enterprise value to sales (EV/sales) multiple and a 25-times EV/EBITDA multiple “on pro-forma capital-induced 2025 estimates.”

Calling Tesla “a trailblazer in the electric vehicle market, BofA’s analysts say the company “could be successful as EV demand increases over time …[even though Tesla] may continue to face operational/financial hurdles, such as supply/demand challenges, potential future losses/cash burn, and the prospect of new competition and technology obsolescence, we believe the company can execute on further equity raises to fund accelerated growth and valuation higher.”

Tesla is the only EV maker to post a positive total return (almost 54%) for the past 12 months.

Fisker Inc. (NYSE: FSR) also has a Neutral rating from BofA’s analysts. The $23 price objective on the stock was cut to $18, implying a potential gain of 42.2% based on a recent price of $12.66.

Based on 2025 estimates, the company’s EV/sales and EV/EBITDA multiples are negative, but Fisker’s stock is “somewhat in line with [Tesla’s] early trading multiples and average EV startup OEM multiples.” BofA’s Buy rating is based on its view that Fisker “is one of the more legitimate among the universe of start-up electric vehicle automakers, which is largely a function of its relationship with contract manufacturer Magna that is critical to its commercialization/industrialization process.”

Lucid Group Inc. (NASDAQ: LCID) is one of two EV stocks that received a Buy rating. BofA’s price objective of $50 was unchanged and represents an upside potential of about 127% based on a recent price of $22.06.

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