Why This Lucid Group Analyst Says It's Among 'Most Legitimate' EV Startups

Although Lucid Group Inc’s LCID stock is currently trading at a premium to the average multiples of its SPAC peers in the electric vehicle original equipment manufacturers space, it is still at a “notable discount” to Tesla Inc’s TSLA recent trading multiples, according to BofA Securities.

The Lucid Group Analyst: John Murphy initiated coverage of Lucid Group with a Buy rating and $30 price target.

The Lucid Group Takeaways: The company seems to be among the “most legitimate start-up EV automakers,” Murphy said in an initiation note.

“Besides the management team’s industry experience, LCID’s key competitive advantages are innovative/competitive technology validated by Formula E, an interesting/attractive product with the Air sedan, arguably intangible value in the Lucid brand, and a greenfield approach to manufacturing electric platforms/vehicles,” the analyst said. 

Near-term financials may not be the best measure of Lucid Group’s success since the company and the industry are in very early stages, he said. 

The true measure will be "customer reservation trends (latest estimate of >10k as of June and Dream Edition fully reserved)” as well as “progress on start and ramp of production (target for SOP as of June had been 2H:21)," Murphy said. 

“Positive developments on both fronts will be necessary for the stock to work, which we generally anticipate.” 

LCID Price Action: Shares of Lucid Group had risen by 2.45% to $19.42 at the time of publication Wednesday.