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Lordstown Motors: What Do Analysts Make of the Endurance’ Latest Delay

2021 is approaching the final stretch and it’s safe to say, Lordstown Motors (RIDE) investors will be glad to put the year’s woes firmly in the past. Shares sit 71% into the red, as the cash-strapped electric truck startup has been unable to get the production of its Endurance pickup truck closer to completion.

In fact, in last week’s Q3 earnings call, the company said the vehicle’s launch will now be delayed until 2H22, amounting to a year late than originally planned.

It’s not the first time the company has delayed the launch, and investors showed their disappointment by sending shares down – again – in the subsequent session.

However, while the constant delays have made the company’s statements hard to trust at this time, Lordstown’s agreement with Foxconn should provide some reassurance the vehicles can make their way to market according to the revised schedule.  

As was first announced in September, Foxconn is set to purchase the Lordstown Facility for $230 million and will invest $50 million in the company. Furthermore, Foxconn will manufacture the Endurance under a contract agreement.

BTIG analyst Gregory Lewis believes the partnership should help Lordstown “lower costs and also enable a smoother production ramp of the Endurance in the back half of 2022.”

However, while the analyst “continues to like the longer-term prospects for the Endurance to carve out a slice of the commercial EV pickup truck market,” the production delay is reason enough for a downgrade; Lewis’ rating drops from Buy to Neutral while the analyst takes his price target off the table. (To watch Lewis’ track record, click here)

Lewis might be confident the Endurance will be able to make an impact in the increasingly crowded EV space, but Deutsche Bank’s Emmanuel Rosner is less certain.

“Operationally, its agreement with Foxconn provides it with additional capital to progress with its Endurance development and somewhat de-risks Lordstown’s financial profile by lowering its cost burden and capital needs,” the analyst said, “But we continue to question the role of its proprietary technology in its future models, value-add for its contract manufacturing partner, and ability to capture meaningful share in the EV space longer term.”

For now, Rosner also stays on the sidelines with a Hold rating, and $7 price target. Still, the figure implies ~20% upside from current levels. (To watch Rosner’s track record, click here)

Looking at the consensus breakdown, there are no positive reviews for RIDE at present; the stock’s Moderate Sell consensus rating is based on 5 Hold ratings and 3 sells. (See RIDE stock analysis on TipRanks)

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Disclaimer: The opinions expressed in this article are solely those of the featured analysts. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.