Has BofA Securtities Picked a Winner Among 9 Automaker Stocks?

The analysts have given the shares a Buy rating because Lucid “is one of the most legitimate among the universe of start-up electric vehicle (EV) automakers and also a relative competitive threat to the universe of incumbent automakers, with innovative technology, attractive product, compelling brand, clean sheet manufacturing approach, and impressive management experience.” The price objective implies a one-times EV/Sales multiple and a 5.5 EV/EBITDA multiple “on pro-forma capital-induced 2030 estimates.”

Rivian Automotive Inc. (NASDAQ: RIVN) is BofA’s other Buy-rated stock. The analysts lowered their price objective from $140 to $100, implying a potential upside of about 157% based on a recent price of $38.98. The price objective implies a one-times EV/sales multiple and a multiple of five-times EV/EBITDA “on pro-forma capital-induced 2030 estimates.”

BofA notes that Rivian “is one of the most viable among the startup EV automakers and also a relative competitive threat to incumbent automakers … due to Rivian’s comprehensive and well-defined business model, direct-to-customer sales and service strategy to own customers and capture revenue throughout the vehicle life-cycle, interesting/attractive product, relatively competitive technology and intangible value on the Rivian brand.”

Canoo Inc. (NASDAQ: GOEV) has an Underperform rating from the BofA team, which also lowered its $5 price objective to $4. Based on a recent price of $5.30, the stock trades about a third higher than BofA’s objective. The analysts’ price objective, like Fisker’s, is based on the EV startups’ experience. They also say that Canoo is “just one of many participants in the automotive industry evolution towards electrification and is also one of the less legitimate among the universe of start-up electric vehicle automakers.”

Lordstown Motors Corp. (NASDAQ: RIDE) is also rated as Underperform, and the stock’s price objective was lowered by a dollar to $3. At a share price of $3.04, the stock is trading essentially right at BofA’s objective. The price objective indicates a “slight discount” to the startup averages that guided Fisker’s and Canoo’s objectives.

The rationale for the Underperform rating is similar to that for Canoo with the added comment that Lordstown “originally ranked fairly well in our AutoTech entrant/SPAC analysis, but a series of operational and financial hurdles since are now plaguing the company as competition is significantly heating up.”

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