Morgan Stanley Downgrades Fisker (FSR) to Equalweight

August 5, 2022 5:43 AM EDT
Get Alerts FSR Hot Sheet
Price: $7.63 +4.23%

Rating Summary:
    7 Buy, 8 Hold, 1 Sell

Rating Trend: = Flat

Today's Overall Ratings:
    Up: 2 | Down: 23 | New: 24
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Morgan Stanley analyst Adam Jonas downgraded Fisker (NYSE: FSR) from Overweight to Equalweight with a price target of $10.00 (from $15.00).

The analyst comments "We covered largely in-line results and a reiterated start of production (SOP) and cash burn guide in our reaction note. In this note we update our earnings forecasts and price target to reflect the need for substantial outside capital (we estimate between $500mm and $1bn by early next year) in order to fund the ramp of the Ocean,as well as development/capex related to other products we have given Fisker credit for in our forecasts. While the supply chain situation may be improving,and the company may be benefiting from easing material costs and a weak Euro, we believe the company is in the situation where access to capital in the next 6 months would be highly deterministic to the company’s fundamental performance. Continuing macro and geopolitical risk, compounded by European gas shortage risk (100% of FSR’s production is in Austria)elevates the near term execution risk. As such, we now assume FSR raises $1bn in 4Q22at the current share price of $10/share compared to a $1.5bn debt raise in FY23that we modeled previously, creating substantial dilution. This, coupled with a more modest outlook for volume through 2030, reduces our price target to $10 (vs. $15 previously) and rating to EW vs. OW previously. Please reach out to us for our updated model."

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 $10.38 yesterday.

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