Analyst overhauls Lucid stock price target after earnings

Peter Rawlinson wants people to know that he's working hard.

The Lucid Group  (LCID)  CEO drove that point home during the electric vehicle maker's fourth-quarter earnings call.

Rawlinson was asked if he intended to take a salary cut to reduce losses or plan to buy back shares to improve stock health.

He said that he received a one-time CEO stock grant in 2021 and that "I think there’s a huge misperception that this one-time grant was received as a salary and somehow we replicate it as my salary in the future."

"In fact, in 2023, at my request, I did not receive a bonus for 2022, nor did I receive any further equity grants in ’22 or ’23," he said.

"My promise is to continue to work tirelessly, day and night, to drive brand awareness, to deliver more cars, to sign up more technology licensing and access agreements, to drive down costs, and to bring the Gravity and midsized platform to market," Rawlinson added, according to a transcript of the call.

Lucid CEO Peter Rawlinson (L) and Lucid SVP of Design Derek Jenkins sit in the front of the 2025 Lucid Gravity (Photo by Robyn Beck / AFP) (Photo by ROBYN BECK/AFP via Getty Images)

ROBYN BECK&solGetty Images

Report: The electric vehicle slowdown is real

Lucid reported fourth-quarter earnings of 29 cents per share on $157.2 million in sales. Analysts surveyed by FactSet expected the company to post a loss of 30 cents a share on $180 million in revenue.

A year ago, Lucid reported a loss of 28 cents a share on $257.7 million in sales.

Related: Analysts revamp Rivian stock price targets after earnings

For 2024, the company forecasts producing 9,000 vehicles, versus estimates of 22,594, according to the five analysts polled by Visible Alpha. The company made 8,428 vehicles in 2023.

Like its EV rival start-up Rivian  (RIVN) , which also reported quarterly results, Lucid saw its shares nosedive after investors reacted to the numbers. 

Bear in mind that 2024 is forecast to be the "Year of More."

That's how the Cox Automotive Economic and Industry Insights team described 2024 for electric vehicles, as in more new products, incentives, inventory, leasing, and infrastructure – "all the more will combine to push EV sales higher in the year ahead."

"Nearly all automakers should see their share of EV sales increase in the year ahead, and those not currently in the game will jump in," the Cox report said.

That sounds quite encouraging, but EV makers responding to slipping sales by slashing prices and cutting back on production are seeing less--not more.

The study acknowledged that "the oft-reported slowdown is real," noting the fourth-quarter EV sales increased year over year by 40% – "a strong result by any measure, except when compared to the growth the industry saw in previous quarters."

Still, the report said, "The momentum is there and is not going away."

During Lucid's earnings conference call, Rawlison listed some of the company’s accolades, such as Car and Driver 10 Best List for 2024, The 2023 World Luxury Car of the Year, and the 2022 Motor Trend Car of the Year.

CEO acknowledges challenges

"I can’t think of any other company that has gotten this far this fast," he said, according to a transcript of the call. "Our superior technology, design, and performance have repeatedly been recognized."

Rawlinson also acknowledged that the company also had some challenges, including "the macroeconomic and higher interest rate environment impacted mainly in this market."

More electric vehicles:

Lucid is planning to start producing a mid-size car late in 2026 to attract a broader customer base after its Gravity SUV goes into production later this year.

"I am confident that the Lucid Gravity will redefine the electric SUV segment with incredible range, superior efficiency, fast charging speed, and interior space that you have to see to believe," he told analysts. 

"It will be unlike anything in its class, and it will be massive for Lucid," Rawlinson added.

Bank of America analyst John Murphy cut his price target for Lucid to $4.50 from $7.

"The company reiterates that there is enough liquidity to continue with the current initiatives at least until 2025, but we'd expect significant capital will be needed to fund the Space program," Murphy said.

The analyst added that he sees risks from softer demand and expects the company will need to raise more capital, "but these points are balanced with our view that Lucid has class-leading powertrain tech combined with attractive products."

Cantor Fitzgerald downgraded Lucid to underweight from neutral with a price target of $4, down from $6. 

The firm cited the company's "persistently high" negative gross margins, lower-than-expected annual production guidance, and lower demand for the downgrade. 

Cantor cut estimates to reflect reduced vehicle production and deliveries and lower expected selling prices. The firm said Lucid continues to lower vehicle prices to remain competitive.

Related: Veteran fund manager picks favorite stocks for 2024

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