Fisker (FSR) Gains on Plans to Manufacture EVs With Foxconn in US, Morgan Stanley Reiterates FSR as a Top-Rated EV Startup Thesis as Bull Case Offers 800% Upside

May 14, 2021 10:10 AM EDT
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Price: $9.22 --0%

Rating Summary:
    6 Buy, 7 Hold, 1 Sell

Rating Trend: Down Down

Today's Overall Ratings:
    Up: 8 | Down: 23 | New: 34
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Shares of Fisker (NYSE: FSR) are up 7% in today’s trading session after the company signed a framework agreement with Foxconn to start producing electric vehicles (EVs) in the United States.

The two companies are planning to reach annual volumes of more than 250,000 units across multiple sites under their project ‘PEAR’ (Personal Electric Automotive Revolution). They are also targeting to offer a lower-priced EV with a starting price of less than $30,000, before incentives.

“Our partnership with Foxconn and the creation of Project PEAR has taken shape with remarkable speed and clarity of vision,” commented Fisker Chairman and Chief Executive Officer, Henrik Fisker.

“In order to deliver on our promise of product breakthroughs from Project PEAR, we needed to rethink every aspect of product development, sourcing, and manufacturing. Our partnership with Foxconn enables us to deliver those industry firsts at a price point that truly opens up electric mobility to the mass market.”

Production is expected to start in the fourth quarter of 2023.

For Morgan Stanley’s analyst Adam Jonas, this is another positive driver that underpins his belief that FSR is the top-rated EV startup in the United States.

“We see FSR’s growth trajectory as tied to the largest manufacturer in the world (Foxconn) who has ambitions of being a major force in the largest IoT market in the world (autonomous cars). In our opinion, Magna and Foxconn are the Michael Jordan and Lebron James of contract manufacturing. And both of these titans have something in common: they’re betting on a little company with roughly 1/100th the market cap of Tesla to make it happen,” the analyst wrote in a note.

According to the analyst, investors are still not fully appreciative of Fisker’s efforts to build EVs with Magna and Foxconn.

"We reiterate our OW rating and $40 price target which offers 300% upside from the current price. Our $90 bull case offers 800% upside from the current price which we believe could be a reasonable level of appreciation relative to the associated industry, competitive, technological and execution risks,” the analyst concludes.

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