New EV shares QuantumScape (QS) and Fisker (FSR) offers ‘the most compelling strategies’ that distinguish them in a fast-moving landscape, analysts say. QuantumScape inventory and Fisker inventory increased.
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Morgan Stanley started QuantumScape overweight with a price target of 70 and started covering Fisker at overweight with a 27 price target.
“We prefer highly differentiated technologies and / or business models with a scale at a reasonable level of risk,” analysts Adam Jonas and Billy Kovanis wrote in a note to clients on 11 February. The note also examined other EV shares.
QuantumScape develops solid technology and counts Volkswagen (VWAGY) as a 20% stakeholder. As manufacturers of electric vehicles want to secure the supply of batteries, QuantumScape has ‘achieved promising results with its patented ceramic separator that enables higher energy density, lower cost, improved safety and faster charging’, the analysts said.
And the luxury manufacturer of electric sport utility vehicles that Fisker works with Magna International (MGA) on EV architecture. The report said Magna’s technology was ‘mastered’ in producing and ‘breaking down’ Fisker’s clean sheet approach. Morgan Stanley likes Fisker’s “all new, asset-light, design-centric EV business model that improves time to market and break-even points.”
Fisker plans to deliver its fully electric Ocean SUV by 2022, with a starting price of $ 40,000.
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Other new EV shares
Meanwhile, analysts have started a manufacturer of electric trucks Lordstown Motors (RY) and Romeo Krag (RMO), which makes battery packs for commercial EV fleet, underweight. They set an 18-price target on Lordstown stock and 12 for Romeo.
Analysts say the EV shares have interesting commercial potential, but we believe they may have less attractive growth rates and risk rewards.
Lordstown in particular has a ‘radical new hub motor technology’ that has never been commercialized on a large scale and has a high execution risk, they added. Meanwhile, Romeo’s prospects will depend on how well it converts orders to production, balances production and maintains margins.
The analysts said that all four EV companies use a clean page approach, while addressing different aspects of the ‘super-growth market’. While Tesla (TSLA) had no choice but to ‘clean up and be completely alone, because nobody wanted to work with an EV startup ten years ago … a lot has changed since then,’ they add.
Shares in QuantumScape rose 17% to 52.72 in the stock market trading. QuantumScape is below the 50 day line. Fisher stock rose 25% to 19.32 as it confirmed a 23.73 break point, according to the MarketSmith chart analysis. Among other EV shares, Tesla fell 1.9%, Lordstown Motors dipped 11% and Romeo lost 6.6%.
Find Aparna Narayanan on Twitter at @IBD_Aparna.
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