Shares of Lucid are off more than 98% from their 2021 all-time highs. Citi thinks it’s time to buy the stock. The bank initiated coverage on the electric vehicle manufacturer with a buy rating and a $17 price target, representing a nearly 71% gain from Wednesday’s close. It’s only the second firm to have a buy rating on the company, according to FactSet. Analyst Michael Ward wrote that the company is at a “positive inflection point.” Just last week, Lucid shared plans for a robotaxi and said it would be cash flow positive late this decade. Ward thinks revenue in 2026 will jump to $2.4 billion, driven by higher production of the company’s Gravity model vehicle. That growth will continue in the coming years thanks to its new Cosmos model and partnerships like that with Uber to help launch an autonomous vehicle robotaxi service, he said. LCID 5Y mountain LCID 5-year chart. “Gravity acceleration, Cosmos ramp, the partnership with PIF [Saudi Arabia’s Public Investment Fund] and the ability to leverage the Uber brand provide compelling support to get LCID through the acceleration phase, additional funding, and a path towards breakeven,” he wrote. Ward added the Cosmos model’s pricing, which is at a lower cost, could help the company build a larger presence in the electric vehicle market. But Citi also labeled the stock as “high risk.” Ward wrote that stems from three key issues: the company’s high debt levels, its negative operating cash flow and the need for more funding to execute its growth plans. “The auto sector is capital intensive, labor intensive, cyclical, low growth, competitive, and highly regulated,” he wrote. “The company will take on added risk in a maturing demand or an increased service environment and will need to find solutions to meet customer needs.”
