Analysts at Deutsche Bank started covering Lordstown Motors Corp. stock with a hold rating, saying that uncertainties around the company’s electric pickup are just too great to justify a higher rating amid competition.
Lordstown RIDE,
The company is targeting commercial fleets offering “based on a value proposition around lower total cost of ownership than traditional alternatives, especially when including federal EV tax credits,” the analysts said in the note Friday.
“While the market opportunity is large and Lordstown’s truck received decent initial interest from potential fleet customers, we see considerable uncertainty ahead,” they said.
Lordstown has also encountered “large operational and supply chain challenges and material cost overruns in its aggressive ramp up towards production,” leading to its need of capital.
And, assuming it gets capital, interest from customers with commercial fleets could dim due to competition from new EV pickup trucks, including Ford Motor Co.’s F,
“And even if demand is there, the business may remain unprofitable for
longer due to higher costs and capital intensity than initially contemplated,” the analysts said.
The Deutsche Bank analysts also set a $8 price target on Lordstown shares, which implies a 23% downside from Friday prices.
The stock is down 48% this year, but holds on to a 4% advance in the past 12 months. That performance compares with gains of 39% and 12% for the S&P 500 index SPX,
