Fisker
- Fisker Inc. spiked 26% on Friday after Morgan Stanley initiated the EV company with an Overweight rating.
- Morgan Stanley set a $27 price target for the company, representing 76% potential upside.
- Fisker has “deceptively low execution risk” that makes it stand out in the crowded EV space, Morgan Stanley said.
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Fisker Inc. spiked as much as 26% on Friday following a bullish initiation note from Morgan Stanley analyst Adam Jonas.
The EV startup was assigned an Overweight rating and $27 price target, representing 76% potential upside from Thursday’s close.
Fisker offers one of the “most compelling strategies and positive risk-reward skews” in the crowded EV space thanks to its “deceptively low execution risk,” which is enabled by its manufacturing partnership with Magna.
The partnership with Magna turned Fisker into an asset-light, design-centered EV business model that improves time to market and increases profit margins, Jonas said. The low capital intensity of Fisker makes it a “sleeper” premium EV company for investors.
“We think investors underestimate that Fisker’s path to commercialization is significantly aided by Magna, which has a mastery of bringing high quality vehicles to market on time, with high quality and good economics,” Jonas explained.
Fisker is expected to begin selling its Ocean crossover SUV in the fourth quarter of 2022 for about $38,000. The company went public via a SPAC merger last year and sports a market valuation of more than $5 billion.
Morgan Stanley's $27 price target assumes Fisker sells 419,000 vehicles by 2030. In Morgan Stanley's bull-case scenario, Fisker could trade at $59, representing 282% potential upside from Thursday's close, if it sells 550,000 vehicles by 2030, according to the note.
"We believe the balance of risk vs opportunity is underestimated in [Fisker's] current market price," Jonas concluded.
