Tesla and Lucid Group are lower after Guggenheim puts the brakes on the runaway bull case

Dec. 20, 2021 8:38 AM ETTesla, Inc. (TSLA), LCIDBy: Clark Schultz, SA News Editor50 Comments

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  • Guggenheim heads into 2022 with a cautious stance on the electric vehicle sector.
  • Analyst Ali Faghri: "In the near term, however, we believe EV adoption may fall short of industry forecasts, particularly in the US due to a less onerous regulatory backdrop and limited product launches in key market segments. We also see insufficient domestic charging infrastructure and battery capacity as near-term bottlenecks."
  • Tesla (NASDAQ:TSLA) is initiated with a Neutral rating with its growth track seen getting trickier with more competition emerging.
  • "We also believe Tesla’s scarcity value from a stock perspective is waning with significantly more EV and AV focused companies going public over the last 12-18 months, giving investors more options at lower valuations to get exposure to secular growth in EVs and AVs," adds Faghri.
  • Guggenheim assigns a price target of $924 to Tesla.
  • Lucid Group (NASDAQ:LCID) is also started off with a Neutral rating by Guggenheim, even as the EV upstart's best-in-class EV technology and product is acknowledged.
  • "Overall, due to strong EV fundamentals and our positive view of the product/technology and management team, we are giving LCID a premium multiple (30% discount to TSLA's FY25 EV/sales) and credit for exceeding 2025 targets."
  • However, when blended with a long-term DCF valuation, little upside is seen for LCID from the current level. Guggenheim gives LCID a price target of $38.
  • Tesla is down 2.09% in premarket action to $913.33. Lucid Group (LCID) is off 4.62% to $38.16.
  • Compare valuation and momentum marks on TSLA and LCID.
  • Sector view: What to watch in the electric vehicle sector in 2022.
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