Citi Starts Fisker (FSR) at Buy, $26 PT

(Updated - November 25, 2020 5:46 AM EST)

Citi analyst Itay Michaeli initiated coverage of Fisker (NYSE: FSR) stock with a “Buy/High Risk” rating and a price target set at $26.00 per share.

Fisker, a premium electric vehicle (EV) platform which is preparing to launch its first vehicle (Ocean) in Q4’22, is described by Michaeli as a “higher-risk investment proposition.” Still, he notes 4 reasons behind his “Buy” call.

(1) The company is targeting the right segment (SUV) and price-points ($38-$69k) for its first EV;

(2) A significant upside potential in the company’s future entry into EMaaS/flex-leases — a similar model as the subscription model Citi wrote about earlier, and one that could substantially expand the TAM from today’s largely 1x transactional business to lifetime vehicle revenue;

(3) Fisker is production asset-light having secured a strong partner in Magna, which de-risks many typical “OEM” hurdles but allows Fisker to retain control of key areas within software/UI/design;

(4) Early signs (web traffic data) suggest the company has the potential to build a strong brand.

Given that FSR is still in early stages, Michaeli outlines three areas to monitor in the next 12 months:

(1) Ocean product milestones/announcements (H1 sees key events);

(2) Reservations/brand momentum, which we track using app download and website traffic data reviewed in this report;

(3) Read-through metrics from EV newcomers.

The firm has a bull case of $60 per share.

For an analyst ratings summary and ratings history on Fisker click here. For more ratings news on Fisker click here.

Shares of Fisker closed at $15.51 yesterday.

You May Also Be Interested In

• Raymond James Starts SpyGlass Pharma (SGP) at Outperform
• ICICI Securities Resumes Oberoi Realty Ltd (OBER:IN) at Buy (1)
• Freedom Broker Upgrades Serve Robotics (SERV) to Buy