Lordstown Motors Slump Over 10% After Electric Truck Maker Slashed Production Outlook
Lordstown Motors shares slumped over 10% in extended trading on Monday after the Ohio-based company reported a deeper-than-expected loss in the first quarter and said it expected Endurance truck production would at best be 50% of previous expectations.
The U.S. electric vehicle automaker reported a quarterly adjusted loss of $0.72 per share, worse than the Wall Street consensus estimates for a loss of $0.28 per share. The company reported a first-quarter 2021 net loss of $125 million, capex of $53 million and cash of $587 million on March 31, 2021.
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Lordstown Motors said it expected Endurance truck production in 2021 will be limited and would at best be 50% of our prior expectations. Expected capital expenditures of between $250 and $275 million and year-end 2021 liquidity of between $50 and 75 million in cash and cash equivalents after giving effect to certain cost reductions and delayed investments.
The company blamed COVID-19-related and industry-wide related issues that led to significantly higher-than-expected expenditures for parts/equipment, expedited shipping costs, and expenses associated with third-party engineering resources.
Following this, Lordstown Motors’ shares slumped over 10.5% to $8.85 in extended trading on Monday. The stock plunged over 50% so far this year.
Lordstown Motors Stock Price Forecast
Five analysts who offered stock ratings for Lordstown Motors in the last three months forecast the average price in 12 months of $15.20 with a high forecast of $40.00 and a low forecast of $1.00.
The average price target represents a 57.19% increase from the last price of $9.67. Of those five analysts, one rated “Buy”, two rated “Hold” and two rated “Sell”, according to Tipranks.
Morgan Stanley gave the stock price forecast of $12 with a high of $35 under a bull scenario and $2 under the worst-case scenario. The firm gave an “Underweight” rating on the cloud-based software company’s stock.
Several other analysts have also updated their stock outlook. Goldman Sachs lowered the target price to $10 from $21. Wolfe Research raised to a peer perform rating from an underperform and lifted their price target to $27 from $14. R. F. Lafferty issued a buy rating and a $35.00 target price.
Analyst Comments
“Lordstown is launching an EV pickup truck aimed at US commercial fleet customers. The segment is attractive and they benefit from a large plant that they acquired from GM. However, we see a high volume of competition from extremely well-capitalized startups, legacy OEMs and Tesla,” noted Adam Jonas, equity analyst at Morgan Stanley.
“We also believe the use of hub-motor propulsion technology (licensed from 3rd party) which has never before been used in a series-production vehicle carries extraordinary execution risk.”
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