Bank of America (BofA) reiterated their Neutral rating and $8.00 price target on Lucid Group (NASDAQ:LCID) after the electric automaker reported 3Q23 delivery results.
Lucid's EV deliveries totaled 1,457 units, approximately 35% lower than BofA's estimated figure of 2,250. The slight increase from the 2nd quarter's 1,404 deliveries indicates a softer demand, indicating that the company might be encountering reduced market interest.
However, analysts at BofA note that Lucid has “more than 700 vehicles in transit to Saudi Arabia for final assembly”. The units were sent, in part, to meet demand in the market.
“The shipments to Saudi Arabia are a positive development as LCID can soon begin to deliver vehicles to the Saudi government, which agreed on a minimum purchase of 50,000 vehicles,” wrote analysts at BofA in a note.
Meanwhile, LCID manufactured 1,550 vehicles, not counting the additional 700+ units currently in transit for finalization in Saudi Arabia. Taken together, these numbers suggest that LCID's quarterly production remains at approximately 2,200 to 2,300 vehicles.
With these numbers, analysts at BofA believe the company will have a hard time achieving profitability, especially considering the company’s AMP-1 facility is only using about 30% of its capacity right now. At this rate, meeting the 2023 production goal of "over 10k" vehicles could pose a significant challenge for LCID.
Overall, Bank of America cut their 3Q revenue estimate from $225 million to $156 million, and now anticipates adjusted EBITDA to be ($704 million) compared to previous forecasts of ($816 million).
For the 3rd quarter of 2023, analysts at BofA estimate EPS to be ($0.35), slightly better than the consensus of ($0.38) and their earlier estimate of ($0.40). Looking at the full year of 2023, they predict an EPS of ($1.51), slightly worse than the consensus of ($1.48) but better than earlier forecasts of ($1.60).
Shares of LCID are down 1.5% in early trading on Wednesday.