UPDATE: Morgan Stanley Starts Romeo Power Inc. (RMO) at Underweight; 'Competition May Prove Formidable'
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Morgan Stanley analyst Adam Jonas initiates coverage on Romeo Power Inc. (NYSE: RMO) with an Underweight rating and a price target of $12.00.
The analyst commented, "Romeo’s value proposition is particularly appealing to smaller scale OEMs, fleets and startups thatneed a reliable and fast to market solution on EVs, but can’t commit the capital and vertical integration to do so in-house. The company sits in the middle/downstream part of the value chain of batteries and does not appear to be involved in vehicle design or cell technology. In our view, the stock's performance will likely come down to how quickly they can convert orders (Nikola + Lion Electric account for >80% of contracted revenue) to production, scale
manufacturing and maintain margins in the face of intense competition, technology change and perhaps most importantly, increased in-sourcing from both suppliers and OEMs.
Shares of Romeo Power Inc. closed at $18.14 yesterday.
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