Fisker, QuantumScape join ‘buy’ list at Morgan Stanley

As more auto makers and companies such as Apple Inc., which reportedly has been developing an electric car for years, work to secure a domestic supply of solid-state batteries, QuantumScape “may be very well positioned,” the analysts, led by Adam Jonas, said in their note Friday.

If the technology, which has been lauded by several, works at scale “we see scope for (QuantumScape) to become one of the largest companies under our coverage,” he said.

As for Fisker, it stands out “as one of the more de-risked and strategically underpinned business models,” Morgan Stanley said. Investors may be underestimating Fisker’s path to commercialization with the deal with auto parts maker Magna International Inc. MGA, -0.63% it inked in January.

The analysts set a price target of $70 for QuantumScape and of $27 for Fisker, representing upside of 30% and 40%, respectively, from Friday prices.

Morgan Stanley started EV pickup maker Lordstown Motors Corp. RIDE, -11.41% at their equivalent of sell, saying that the company faces “a flood of new competition in EV pickups from startups to legacy OEMs with far greater scale and distribution advantages.” It set its price target on Lordstown at $18, representing a downside around 35% from Friday prices.

Battery startup Romeo Power Inc. RMO, -4.91% was also started at the equivalent of a sell rating. 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,” the analysts said.

Too much of its contracted revenue comes from Nikola Corp. NKLA, -2.25% and Canada-based Lion Electric Co , and the stock performance is tied to how quickly Romeo can convert orders and maintain margins in face of “intense competition.” The analysts had a $12 price target on Romeo, representing a downside around 30%.