CFRA Reiterates Sell Rating on Lucid Group Inc. (LCID)
CFRA analyst Garrett Nelson reiterated a Sell rating and $2.00 price target on Lucid Group Inc. (NASDAQ: LCID).
The analyst comments "We maintain our 12-month target of $2. LCID shares are down ~14% after announcing a common stock offering of 262.4M shares on Wednesday afternoon. The company also released preliminary financial results for Q3, saying it generated quarterly revenue of approximately $200M and an operating loss between $765M and $790M, which compare to the consensus estimates of $191M and $719M, respectively. Notably, LCID's revenue implies a steep sequential drop in price realizations of approximately $12K/vehicle. The company also said its majority stockholder (~59% ownership), Ayar Third Investment Company of Saudi Arabia, intends to purchase 374M shares in a private placement at the same price. While the offering helps boost liquidity, the fact it resorted to issuing equity after such a precipitous decline for the stock over the past several quarters is a major red flag. With unit costs that are still unsustainably high and EV competition increasing, we reiterate our Sell opinion on the shares."
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Shares of Lucid Group Inc. closed at $3.28 yesterday.