Institutional investors and professional traders rely on The Fly to keep up-to-the-second on breaking news in the electric vehicle and clean energy space, as well as which stocks in these sectors that the best analysts on Wall Street are saying to buy and sell.
From the hotly-debated high-flier Tesla, Wall Street's newest darling Rivian, traditional-stalwarts turned EV-upstarts GM and Ford to the numerous SPAC-deal makers that have come public in this red-hot space, The Fly has you covered with "Charged," a weekly recap of the top stories and expert calls in the sector.
CYBERTRUCK PRODUCTION: Tesla (TSLA) intends to start initial production of its Cybertruck by the end of the first quarter of 2023, delaying its plan to start production later in 2020, Reuters' Hyunjoo Jin reported last, citing a person familiar with the matter. The person said the delay comes as Tesla is changing features and functions of the electric pickup to make a compelling product as competition heats up in the segment.
Meanwhile, Credit Suisse analyst Dan Levy raised the firm's price target on Tesla to $1,025 from $830 on Tuesday, while keeping a Neutral rating on the shares. The analyst believes favorable fundamentals can continue to support Tesla stock. Yet non-fundamental factors will also need to remain supportive, he added. Levy pointed out that his above-consensus fourth quarter earnings per share estimate assumes quarter-over-quarter margin expansion.
BUY RIVIAN: Last week, Redburn analyst Charles Coldicott initiated coverage of Rivian Automotive (RIVN) with a Buy rating and $141 fair value estimate. The analyst believes demand will "vastly outstrip Rivian's ability to produce." The company's vehicles are innovative with "incredible acceleration given the vehicles' size." Coldicott further added that Rivian beat Tesla, Ford (F) and General Motors (GM) to market with the first electric pickup. This, along with the large SUV space, offers the company "enormous room to grow," he contended. The analyst expects Rivian to ramp up volumes to 345,000 by 2025 and 1.5M in 2030.
RISKS OF COMPETING AGAINST TESLA: At that same time, Redburn's Coldicott initiated coverage of Lucid Group (LCID) with a Neutral rating and $39 fair value estimate. Lucid has "a great product" and what particularly differentiates Lucid from peers is its powertrain technology, which "surpasses even Tesla in some respects," Coldicott told investors. While this powertrain technology may give Lucid a structural advantage on range and/or manufacturing cost, he sees greater risks to the investment case at Lucid than at peer Rivian since the former is more directly competing against Tesla with its debut model than the latter. His forecasts for the Lucid Air assume "fairly moderate" market share in the U.S., but Coldicott also noted that the global market for large sedans is heavily skewed to China and this region may pose greater challenges for Lucid to enter than the domestic market.
BULLISH ON NIO: Macquarie analyst Erica Chen initiated coverage of Nio (NIO) with an Outperform rating and $37.70 price target. Nio is the earliest electric vehicle start-up in the market with a focus on the affordable luxury auto segment and customer service, Chen told investors in a research note. The analyst forecasts 31% annual electric vehicle unit sales growth for China and 52% annual revenue growth for Nio through 2024. Battery swapping is one of the means for energy replenishment and Nio is a "big supporter of this business model, which is promoted by the China government," Chen added.
GO-TO FOR RENEWABLE POWER INVESTMENT: BMO Capital analyst Ben Pham upgraded Brookfield Renewable Partners (BEP) to Outperform from Market Perform with a price target of $38, down from $40. The company offers "industry-leading" 10%-plus growth and has "strong" investment grade-rated balance sheet that can fund growth without requiring external equity, Pham told investors in a research note. As one of the largest publicly traded renewable power companies with a global footprint across all key technologies, Brookfield Renewable Partners is the "go-to" for renewable power investment, the analyst added.
CIBC analyst Mak Jarvi also upgraded Brookfield Renewable Partners to Outperformer from Neutral with a price target of $40, down from $42. The stock's current trading multiple premium "seems more rational," said the analyst, who likes the company's positioning as he remains positive on renewable growth and sees the current dividend as relatively attractive.
Meanwhile, National Bank analyst Rupert Merer upgraded Brookfield Renewable Partners to Outperform from Sector Perform with an unchanged price target of $38. The company has sufficient liquidity to hit its capital deployment targets and its growth picture is improving, Merer told investors in a research note on Tuesday. While rising bond yields could be a headwind given Brookfield's long duration cash flows, the rising inflationary trend could provide benefit given 70% of the company's contracted revenue is inflation-indexed, the analyst added.
CHALLENGES REMAIN BUT CONCERNS LARGELY DISSIPATED: Guggenheim analyst Joseph Osha upgraded Enphase Energy (ENPH) to Buy from Neutral with a $213 price target. Although challenges remain, concerns regarding high valuations, high consensus expectations and potential negative news "have largely dissipated," Osha told investors in a research note. The analyst thinks storage hardware suppliers, including Enphase, are likely to continue to enjoy good pricing leverage through 2022. While it is unlikely that the Biden Administration's Build Back Better legislation makes it into law, work suggests that there is bipartisan support for the environmental elements of the legislation, Osha wrote. At this point, stock valuations seem to reflect low expectations for any progress on policy, he added.
MORE BALANCED RISK/REWARD: Morgan Stanley analyst Stephen Byrd upgraded SunPower (SPWR) to Equal Weight from Underweight with a price target of $23, down from $27. Following a recent selloff, shares have declined back to a level that is closer to the broader solar group's total 2021 performance level and he now sees a more balanced risk reward, Byrd said. The stock is now trading at a discount to higher margin inverter stocks Enphase Energy and SolarEdge (SEDG) and a premium to First Solar (FSLR) and Array Technologies (ARRY), which Byrd views as better aligned with how he view's SunPower's competitive differentiation, growth, and margin outlooks.
Osha also upgraded SolarEdge Technologies to Buy from Neutral with a $329 price target. The analyst thinks SolarEdge's residential business can "propel the stock higher from here," especially if the company gets its storage offerings on track in 2022.
SELL FTC SOLAR: Bank of America analyst Julien Dumoulin-Smith downgraded FTC Solar (FTCI) to Underperform from Neutral with a price target of $5, down from $9, citing what he sees as both "systematic and idiosyncratic factors that stack up against" the company in the near-term. FTC Solar is among the most exposed to potential delays associated with utility-scale solar projects in the U.S. for 2022, Dumoulin-Smith argued.
Tesla
+10.94 (+1.04%)
Rivian Automotive
-3.29 (-4.12%)
Ford
-0.58 (-2.30%)
General Motors
-2.02 (-3.31%)
Lucid Group
-1.22 (-2.89%)
Nio
-0.4 (-1.29%)
Brookfield Renewable Partners
+0.41 (+1.25%)
Enphase Energy
-3.63 (-2.54%)
SunPower
-0.27 (-1.34%)
SolarEdge
-7.58 (-2.98%)
Array Technologies
-0.86 (-6.57%)
First Solar
-1.815 (-2.18%)
FTC Solar
-0.52 (-10.14%)