Needham rates Fisker ‘Buy,' Tesla ‘Hold,' and Lucid at ‘Sell’ in sweeping EV initiations

Sep. 14, 2022 4:39 PM ETFisker Inc. (FSR)BYDDF, BYDDY, TSLA, RIVN, LCIDBy: Kevin P. Curran, SA News Editor34 Comments

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Needham analyst Vikram Bagri launched new coverage of a number of EV manufacturers on Wednesday, with ratings on companies populating the industry spanning the spectrum.

“Our key takeaway is that the growth forecasts for EVs still appear conservative,” he wrote. “The individual OEM targets, government mandates for banning internal combustion engine (ICE) vehicles around the world, and capital being invested in the space all point to stronger growth in EV adoption.”

He added that the rapid rise in gas prices in 2022, increasing availability of EV models, and government support has made the environment for EVs “more constructive than ever” with adoption picking up rapidly.

However, Bagri warned that bullishness on the EV space overall does not translate to bullishness on all players operating in the industry for the near term.

For example, Lucid Group (LCID) was rated at a Sell-equivalent rating among the initiations and Rivian (RIVN) was rated “Hold.” Additionally, Bagri upgraded Tesla (TSLA) from a prior Sell-equivalent to “Hold” in assuming coverage of the stock. He cited concerns on Tesla’s (TSLA) powerful competition in China from domestic players like BYD Company (OTCPK:BYDDY) as a main reason for a still-cautious rating.

Bagri was more bullish on Fisker, due to valuation considerations, business strategy, and the technology of its SUV models.

“FSR is entering the EV market with SUVs that feature cutting edge technology at an affordable price, which opens a vast opportunity set for the company,” he wrote. “Moreover, FSR aims to achieve a dominant position without significant capital outlays through contract manufacturing agreements with the largest and most reputed companies.”

Fisker (NYSE:FSR) stock rose 1.3% in Wednesday’s extended session, adding to a 3.94% gain during the day’s trading.

Dig into Fisker’s valuation.

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