Deutsche Bank Cautious on Joby Aviation Inc (JOBY): 'Mixed reactions to $500m cap raise', Shares Up 25pct Today

Deutsche Bank analyst Edison Yu reiterated a Sell rating and $4.00 price target on Joby Aviation Inc (NYSE: JOBY)

The analyst comments "Joby announced a large $500m private placement from Toyota via two tranches of equal value with the first portion set to close later this year and the second in 2025 (pending certain regulatory hurdles and manufacturing arrangements). Pricing came in $5.03 for 99.4m shares vs. yesterday's closing price or $4.80. On the positive side, this naturally provides more runway for Joby as PF cash should be around $1.2bn now exiting 3Q24 by our estimates (vs. Archer just below $500m plus Stellantis incremental funding). Moreover, since Toyota is taking the entire allocation, we expect minimal risk of selling pressure given the automaker's deep strategic role. Post the transaction, Toyota becomes the largest single shareholder at 178m shares (>20%), even more than JoeBen Bevirt's 95m shares (12%). On the negative side, the timing and amount confirm our concerns that Joby needs a massive amount of capital to actually make it through certification/ commercialization. The cash burn this year alone will be >$450m and even with this raise, we suspect another $300-500m may be needed late next year or in early 2026. Furthermore, we suspect management likely could not find institutional money at large enough levels and was concerned with the trajectory of the stock, having seen no material strength despite an increasingly accommodative macro backdrop for growth/risk assets, thereby deciding to raise now vs. later. Our concerns as outlined in our last report (Mixed signals) remain; maintain Sell and $4 price target."

For an analyst ratings summary and ratings history on Joby Aviation Inc click here. For more ratings news on Joby Aviation Inc click here.

Shares of Joby Aviation Inc closed at $4.80 yesterday.

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