Fisker Stock Drops 7% Following Morgan Stanley Downgrade Due To Weaker EV Adoption Forecasts

Fisker Stock

Fisker Stock (NYSE:FSR)

On Wednesday, Morgan Stanley changed its recommendation on the electric car manufacturer Fisker (NYSE:FSR), moving it from Equal Weight to Underweight.

Analyst Adam Jonas and his colleagues have expressed their admiration for the design of the Fisker model. Still, they are skeptical about the ability of the firm to finance the ramp-up of manufacturing at scale.

Jonas and the squad maintained their position. Estimates for revenues in FY23 and FY24 have not altered; however, it is now anticipated that the second half of the decade will bring in lower revenues because the adoption curve for electric vehicles is shifting to the right.

“While we admire the FSR narrative and strategy (design, engineering, and supply chain, as well as their partnership with Tier 1 supplier Magna-Steyr), FSR’s need for cash, an adverse rebalancing of supply and demand in the EV field (where even Tesla, the current market leader, has announced steep and unprecedented price cuts internationally), and a possibly congested EV market amid a period of continued economic deterioration prompts us to downgrade the company to UW.”

Morgan Stanley has given Fisker stock a price objective of $4. This represents 2.6 times the company’s estimated EBITDA for 2030, 4.9 times its profits for 2030, and 0.2 times its sales for 2030. The bull case PT from Morgan Stanley is $15, while the bear case PT is $1. Both of these numbers are included in the matrix.

The price of Fisker stock plummeted 6.99% before the market opened, bringing it to $6.79. This compares to a range of trading prices during the last 52 weeks of $6.41 to $14.74.

Featured Image: Freepik @ tongstocker1987

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