UPDATE: Lordstown Motors (RIDE) PT Lowered to $12 at Morgan Stanley, Dependence on Outside Capital Increasing
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Morgan Stanley analyst Adam Jonas lowered the price target on Lordstown Motors (NASDAQ: RIDE) to $12.00 (from $18.00) while maintaining a Underweight rating after the company guided to a sharp (5x) increase in caped and opex to accelerate capacity expansion, product development and insourcing. This is likely to increase the dependency on outside capital driving the Underweight rating.
The analyst stated "RIDE is targeting FY21 capex of between $250mm and $275mm vs. our previous expectation (based on prior guidance) of $45mm. The company targets a current year capex spend equal to 5 years of capex spend combined in our prior estimates. Management explained the increase in spending was related primarily to: (1) expanding production capacity to 60k units, (2) development of the company's second vehicle ( a van) and (3) insourcing of some tooling/equipment."
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