Wolfe Research downgraded Fisker (NYSE:FSR) to an Underperform rating (From Peer Perform) and set their 12-month price target on the stock at $6.00.
Wolfe analysts continue to view the electric automaker as “the most speculative OEM within our coverage” as the company attempts to build a brand within some of the most highly saturated Industry segments.
The competitive landscape of the industry continues to intensify as Tesla (NASDAQ:TSLA) and several Chinese OEMs press their cost advantages by aggressively ramping up exports and cutting prices. In order to survive, Wolfe believes that Fisker must either attain highly competitive costs or pursue emotional products that appeal to niche subsegments, allowing the company to attain premium prices.
The analysts wrote in a note, “We acknowledge that Fisker has made real progress over the last ~2 years, having brought their first vehicle to market. Moreover, their recently announced sale of emission credits in the US could help bolster near-term cash flows. However, as with other EV automakers, we don’t expect investors to apply much value to credit sales, especially as legacy OEs ramp-up their own EVs (which should reduce the value of these credits). Moreover, we do not see FSR as having attained the brand, technologies, or costs that are required to ensure viability... especially in the competitive segments that FSR has targeted.”
Shares of FSR are down 3.32% in pre-market trading on Thursday.