Institutional investors and professional traders rely on The Fly to keep up-to-the-second on breaking news in the electric vehicle and clean energy space, as well as which stocks in these sectors that the best analysts on Wall Street are saying to buy and sell.
From the hotly-debated high-flier Tesla (TSLA), Wall Street’s newest darling Rivian (RIVN), traditional-stalwarts turned EV-upstarts GM (GM) and Ford (F) to the numerous SPAC-deal makers that have come public in this red-hot space, The Fly has you covered with "Charged," a weekly recap of the top stories and expert calls in the sector.
VAN DEAL: Amazon (AMZN) and Rivian are in discussions to abandon the exclusivity part of their electric van agreement, after the tech giant’s order for 2023 came in at the low end of a previously provided range, the Wall Street Journal’s Sean McLain, Dana Mattioli, and Nora Eckert report, citing people familiar with the matter. Under the terms of a 2019 pact, Rivian is required to sell all of the vans it makes to Amazon, though recently Amazon notified Rivian it sought to purchase roughly 10,000 vans this year, which was the low end of the previously communicated range, the authors say. In response, Rivian is aiming to remove the exclusivity terms, which would allow it to sell such vans to other customers, the authors say, noting that talks are ongoing.
Click here to check out Rivian’s recent Media Buzz Sentiment as measured by TipRanks.
CHINA EV TRIO TARGETS: Morgan Stanley lowered its price targets on Nio (NIO) to $12 from $16.10, raised its target on Li Auto (LI) to $30 from $23, and raised Xpeng’s (XPEV) to $12.50 from $12. Tesla’s price cuts in China triggered broader price competition, which, together with weaker year-to-date sales post-stimulus, has pressured China’s EV names’ first half sales and margin. The firm has cut its earnings forecasts and price targets for the China "EV trio" to factor in a more challenging operating environment, but reiterates its Overweight ratings on the trio of Nio, XPeng and Li Auto for their valuation, balance sheet strength, speed of innovation and model iteration.
CHINA PRICE WAR: Auto makers and dealerships in China are slashing prices after the lifting of pandemic controls failed to reverse slumping demand in the world’s largest car market, The Wall Street Journal’s Selina Cheng reports. Companies including Ford Motor, BMW Group (BMWYY), and Volkswagen (VWAGY) are offering deep discounts and promotions on electric vehicles after China phased out its nationwide subsidies for EVs. Others including General Motors and the maker of Citroen are slashing prices on their gas-powered cars, the author notes. China’s overall retail car sales fell by almost a fifth in January and February from a year earlier, with many consumers avoiding big-ticket purchases amid an uncertain outlook for the economy.
ON THE SIDELINES: BMO Capital initiated coverage of Lion Electric (LEV) with a Market Perform rating and $2 price target. Lion is a designer, manufacturer, and distributor of commercial electric vehicles. The firm considers the company to be ahead of several pure-play competitors on product differentiation and stage of ramp, but believes advantages are already reflected in the stock’s valuation. It says Lion’s cadence for sales and margin to accelerate will take time.
BUY ENPHASE: Raymond James upgraded Enphase Energy (ENPH) to Outperform from Market Perform with a $225 price target. Enphase shares are down 31% year-to-date, as compared to the ECO index’s decline of 5%, the firm tells investors in a research note. The upgrade reflects Raymond’s preference for clean tech companies with a European overweight, but the firm is also mindful of potential heightened competitive pressure in the core business from new entrants.
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