Lucid Group is expected to face more pressure to meet deliveries expectations
DKosig
Lucid Group (NASDAQ:LCID) faces increased pressure to meet the expected pace of production and deliveries in the second half of the year.
The electric vehicle maker reported Q2 deliveries of 1,404. The deliveries tally was more than double the amount from a year ago, but missed the consensus estimate for 1,818 deliveries and was not a sequential improvement from Q1.
Bank of America analyst John Murphy warned that Lucid's (LCID) weaker deliveries suggest the company is continuing to experience tepid demand for the Air sedan even before it has fully ramped production. "In our view, this puts pressure on management to deliver the high-end trim levels of the Sapphire Air shortly to bridge the gap until 2024 when the Gravity crossover utility vehicle is launched," he warned.
The Gravity model is a highly-anticipated three-row crossover utility vehicle that is seen as having a better probability of matching market demand in its segment.
Ahead of Lucid's (LCID) earnings report in early August, BofA reduced EBIT estimates. Notably, the BofA model now reflects the $3B share issuance, which serves to raise EPS because the higher share count reduces per share loss. Overall, Bofa has a Neutral rating on Lucid (LCID). Murphy and team see risks from softer demand and expect the company will need to raise more capital, but they think those factors are balanced by LCID being one of the most attractive among the universe of start-up EV automakers because it has class-leading powertrain tech and other key attributes.
Shares of Lucid Group (LCID) rose 1.94% premarket to $6.83 vs. the 52-week trading range of $5.46 to $21.78.
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