Adam Jonas and the team over at Morgan Stanley just initiated coverage on Lucid Motors (NASDAQ:LCID), and they aren’t impressed. Adam slapped Lucid with an “Underperform” rating and a $12 price target. However, we remain as bullish as ever on LCID stock and aren’t concerned.Source: gg5795 / Shutterstock.com
Morgan Stanley’s analyst had a few key points for his bearish reading.
For one, Jonas believes Lucid’s valuation implies a high probability of big market share gains, high profit margins, or both. The problem here is that the team doesn’t see those things happening. They don’t believe the super-premium electric vehicle (EV) market is that big, and they see the competition as a huge headwind for the EV company.
We really respect Jonas. He’s a great analyst. He has some very prescient calls, and on a lot of things, we see eye to eye with him. And we’ve seen eye to eye with him on these things for several years. He’s one of the best analysts in the business.
But, we respectfully disagree with his analysis of Lucid Motors and think he’s missing the boat. He’s failing to see the forest for the trees.
His initial thinking is spot on — the valuation does imply an unusually high probability of success. And we think it absolutely should.
Where our viewpoints differ is in how we see Lucid Motors evolving as the EV market rapidly grows.
LCID Stock: EVs and Lucid Motors Are Both Here to Stay
The EV industry is a proven industry that is very much primed for exponential future growth. And a company’s ability to succeed in a proven industry ultimately comes down to its ability to execute, which is a direct byproduct of its team’s competence.
And Lucid Motors has the best team in the business.
We’ve covered this several times, but we’ll recap it again here.
Basically, Lucid is a premium blend of talented individuals from the best companies out there.
The same folks who helped build Tesla (NASDAQ:TSLA) and create a multi-hundred-billion dollar empire now work at Lucid Motors. These folks are working alongside top Apple (NASDAQ:AAPL) executives and well-respected automotive industry veterans to make this EV company a future ubiquity. It really doesn’t get any better than that.
Plus, Lucid Motors is funded by some of the deepest pockets in the world — the Saudi Public Investment Fund. This extremely talented team has unmatched resources to execute its vision. The probability of success here is, in fact, incredulously high.
Now, Jonas makes the excellent point that the super-premium EV market isn’t that large. That’s true — it isn’t.
But Lucid’s end goal is not to offer a sole, premium EV.
Lucid’s plan is to sell a bunch of super-premium EVs and foster second-to-none brand equity first. Afterward, the company can leverage that brand equity and economies of scale to produce and sell cheaper EVs down the road, with that same brand equity and those same profit margins.
It’s a page right out of Tesla’s playbook. Tesla began as a super-premium EV maker. But now, Tesla is just an EV maker.
Lucid Motors will follow that same tried-and-true path.
So, to say that the addressable market here is only really expensive EVs is short-sighted. That’s the addressable market for maybe the next two years. By 2030, the total addressable market will be every car at every price point.
As far as margins, we are all aware battery costs are declining, and economies of scale in auto manufacturing drive reductions in production costs. So, unit input costs should fall over time. As long as unit revenues stay high, then unit profit margins should be robust at scale. And unit revenues should stay high, because Lucid is strategically growing its business in a way so as to maintain ultra-high brand equity.
In other words, we think there is indeed a very high probability that Lucid Motors turns into a major automaker one day across all points, and that its business will feature industry-leading profit margins.
If you believe that to be true, then LCID stock is a no-brainer buy below $20.
We think this is one of those stocks that you buy today, cost-average into over the next several years and then consider selling by 2025 — when it’s a $200-plus stock.
Naturally, LCID is ranks among my favorite stocks in the EV industry, or any industry for that matter. But there are many more that make my list. And some that I like more than Lucid stock.
These stocks are in my premium, paid newsletters … but I also talk about these stocks quite frequently in my free e-letter, Hypergrowth Investing, where I cover emerging megatrends and high-risk, high-reward stock picks every day.
By becoming a Hypergrowth Investing subscriber, you won’t pay a dime and will always get high-quality, actionable information on a number of market themes and picks … each of which could make you a ton of money over the near- to long-term.
Further, you’ll also get my latest research report, 11 EV Stocks to Buy for 2021.
Just click here and you’re well on your way to getting your first issue directly in your inbox. Just look for it each day at 7:30 a.m. Eastern.
On the date of publication, Luke Lango did not have (either directly or indirectly) any positions in the securities mentioned in this article.
The post Adam Jonas Is Wrong About Lucid Group. Here’s Why LCID Stock Is a No-Brainer Below $20. appeared first on InvestorPlace.electric vehicle
Blue Sky Uranium Sued By Environmental Activists Over Flagship Project
When it comes to markets, sometimes, things just don’t go your way. After rising quickly in a sudden bull market
The post Blue Sky Uranium Sued By Environmental…
When it comes to markets, sometimes, things just don’t go your way. After rising quickly in a sudden bull market for uranium, Blue Sky Uranium Corp (TSXV: BSK) appears to have just had the rug pulled out from under it.
After waiting years for a bull market, the company this morning notified the market that just when things were going its way, its become embroiled in a lawsuit. The firm this morning indicated it has received noticed that anti-mining and environmental activists in Argentina, where the company is focused, have taken aim at its flagship asset, the Amarillo Grande project.
The activists have filed a lawsuit before the Supreme Court of the Province of Rio Negro in the country, arguing for environmental protection rights, or Amparo, against the project. The bright side here, is that attempts to halt exploration of the properties via a preliminary request until the final decision was made on the case was denied by a Judge assigned to the matter.
Also included in the lawsuit is the Government of Rio Negro, whom is defending the claim. The company for its part states that it has obtained all relevant permits, and believes that the claims made by the activists are without merit.
In the interim, Blue Sky has stated that it intends to proceed with its planned exploration of the properties, working under the pretense of “business as normal.” The company indicated that it continues to proceed with its ongoing drill program as planned, wherein the firm is currently drilling 4,500 metres in aggregate on its Amarillo Grande Uranium-Vanadium project.
Blue Sky Uranium last traded at $0.355 on the TSX Venture.
Information for this briefing was found via Sedar and the companies mentioned. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.
The post Blue Sky Uranium Sued By Environmental Activists Over Flagship Project appeared first on the deep dive.tsx tsxv aim vanadium uranium
GM Advises Bolt Owners to Park 50ft Away From Other Vehicles — Report
Global vehicle manufacturer General Motors (GM) has advised its customers to park their Bolt electric cars at least 50 feet away from other vehicles due…
Global vehicle manufacturer General Motors (GM) has advised its customers to park their Bolt electric cars at least 50 feet away from other vehicles due to the risk of fire, according to a report published by StreetInsider.com.
The company said, “In an effort to reduce potential damage to structures and nearby vehicles in the rare event of a potential fire, we recommend parking on the top floor or on an open-air deck and park 50 feet or more away from another vehicle.”
GM has also advised not to leave Bolt EVs unattended while charging, even if the customer is using a charging station in a parking deck. Earlier, GM had requested Bolt owners to park their vehicles outdoors, away from structures, and to not charge them overnight.
The new warning comes after the company recalled over 140,000 Chevrolet Bolts, manufactured since 2016, due to the risk of batteries catching fire. There are confirmed reports of at least 12 vehicles catching fires but more continue to be reported. (See General Motors stock chart on TipRanks)
On September 13, Barclays analyst Brian Johnson reiterated a Buy rating on the stock and lowered the price target to $68 from $71 (32% upside potential).
In a research note to investors, the analyst said, “The semiconductor chip shortage is driving further downside to GM North America wholesales, but GM can still deliver results inside its guidance range.”
Overall, the stock has a Strong Buy consensus rating based on 13 Buys and 1 Hold. The average General Motors price target of $73.36 implies 42.4% upside potential. Shares of the company have gained 61.4% over the past year.
The post GM Advises Bolt Owners to Park 50ft Away From Other Vehicles — Report appeared first on TipRanks Financial Blog.batteries
BASF and CATL partner with a focus on cathode active materials and battery recycling
BASF SE (BASF) and Contemporary Amperex Technology Co., Limited (CATL) announced a strategic partnership on battery materials solutions, including cathode…
BASF SE (BASF) and Contemporary Amperex Technology Co., Limited (CATL) announced a strategic partnership on battery materials solutions, including cathode active materials (CAM) and battery recycling. The collaboration aims at developing a sustainable battery value chain, in support of CATL’s localization in Europe and contributes to achieving both companies’ global carbon neutrality goals.
CATL has launched its project to build up its first European factory in Germany to localize lithium-ion battery production. With this, it is accelerating the development of a local supply chain for European customers and consumers.
As the largest chemical supplier to the automotive industry, BASF has established a strong position in the CAM market including a global manufacturing and R&D footprint, and a broad portfolio of mid- to high-nickel, manganese-rich, cobalt-free CAM.
In Europe, BASF is introducing CAM production with an industry-leading carbon footprint through its advanced process technology, a secured local raw materials supply chain, a favorable energy mix for production, as well as short and effective logistics along the supply chain.
The strategic partnership with CATL allows BASF to work closely with a globally leading battery producer on CAM and battery recycling. This cooperation will deepen BASF’s expertise and strengthen its global market position.
Through the partnership with BASF, CATL targets to improve its European service capabilities by developing a localized battery recycling network and a secure raw material supply chain in the region.
The transformation towards electromobility requires strong partnerships along the value chain. Pairing BASF’s strong position as a leading supplier for cathode active materials with CATL’s expertise in lithium-ion batteries will speed up innovation and the formation of a sustainable battery value chain worldwide.—Dr. Markus Kamieth, Member of BASF’s Board of Executive Directors
The partnership with BASF is another important step for our localization journey in Europe. With CATL’s innovative battery technology and BASF’s deep materials expertise, we will further enhance our capability to support our worldwide customers and accelerate the global drive towards carbon neutrality.—Zhou Jia, President of CATL
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