Fisker (NYSE:FSR) has seen a volatile month of trading, declining 30%. Fisker initially peaked investor interests early last year, after the company announced its intentions to merge with Spartan Energy Acquisition (SPAQ). In addition, the merger was one of the most talked about SPAC propositions in 2020. Fisker Inc. engages in the production of electric powered vehicles and was founded by Henrik Fisker and Geeta Gupta-Fisker. Since the completion of the merger, analysts have remained bullish on FSR stock. Analysts John Murphy from the Bank of America suggests the stock could reach $31 over the next 12 months. This article will breakdown everything you need to know about the Fisker stock forecast for 2022.
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Analysts remain bullish on Fisker’s stock forecast for 2022
Firstly, across the board of 9 Wallstreet analysts the average 12 month price target is set at $26.30 a share. This suggests an average upside of 156% from the current trading price. In addition, out of the 11 analysts 7 have listed a Buy rating, 2 have listed a Hold rating and 2 analyst listing a Sell rating. The following price targets are the most recent to date, which show the current consensus amongst “smart money” institutions:
- The Goldman Sachs Group 4/28/2021 – Analyst Mark Delaney downgraded the firms 12 month price target to $10 a share. Delaney also downgraded the companies rating from a Neutral to a Sell.
- Bank of America 4/20/2021 – Analyst John Murphy initiated coverage on Fisker stock with a 12 month price target of $31 a share and a buy rating. The target suggests an upside of 100%+ from the current trading price. Murphy noted Fisker is “standing out even with plenty of fish in the ocean of new EV automakers,”.
- Barclays 4/1/2021 – Analyst Brian Johnson initiated coverage at $17 a share with an equal weight rating on FSR stock. The target remains the most conservative across the board in 2021.
- Morgan Stanley 3/4/2021 – Analyst Adam Jonas boosted the 12 month price target to $40 a share, giving the stock a 164% implied return. This target is currently the street high and Morgan Stanley remain the biggest bulls on Fisker stock.
What this means for investors?
After reviewing the recent price targets on Wallstreet, we can conclude the average price target does suggest upside from the current trading price. However, the most recent price target from Mark Delaney is also Wallstreets lowest target to date. The analyst noted concern surrounding the increased competition that FSR will continue to face with delayed production and sales timing.
Financial forecasts for Fisker in 2022
Firstly, its important to note Fisker is not currently generating any revenue or sales. The company plans to first generate income after the launch and delivery of the Ocean SUV model. The unique operating model of Fisker will see the company outsource the manufacturing of their vehicles. The unorthodox approach allows Fisker to reduce overhead costs significantly. The company believes this should reflect positively on the balance sheet as they begin operations/delivering vehicles in 2022.
The Q4 earnings reinforced Fisker’s strong cash position as a result of the $977 million in net proceeds from the SPAC merger. The net proceeds are to be used to support “Fisker’s product development, working capital and capital expenditure requirements.” Furthermore, Fisker noted in March that they have now surpassed 14,000 reservations for its Ocean SUV. This illustrates growing interest in the vehicle however the company has many hurdles to jump prior to meeting the demand in 2022.
Secondly, the company has forecasted the business to generate $600 million in revenue in 2022. Furthermore, the company expects this to multiply to $3.3 Billion in 2023 and $10.6 Billion in 2024 according to a Fisker presentation. Fisker predicts it will earn $2 Billion EBITDA by 2024 and $2.8 Billion in 2025. However, it is worth noting the company is yet to generate any revenue and these figure are only estimates.
What’s in the pipeline for Fisker in 2022?
The company expects to make 225,000 vehicles by 2025 according to Barron. The vehicles will be manufactured by their partner Magna. Fisker says the offset manufacturing is a strategy to de-risk its business model. In addition, the company plans to sell the Ocean model from $37,500 which is competitive in the SUV EV market. Furthermore, customers will also be allowed to lease their electric vehicles online and return after any given time period. The expectation is for the leasing price to be the most competitive in the EV market. Essentially, Fisker’s pricing model is targeting future consumers who prefer accessibility and use over ownership.
In conclusion across the board of analysts on Wallstreet, Fisker’s stock forecast for the years ahead remains up for debate. The stock is likely to experience high levels of volatility throughout the year as the company is still in a pre-revenue phase and does not expect to deliver a vehicle until 2022. However, Fisker are predicting strong operating performance with an estimated 225,000 vehicles to be made by 2025.
Written by Tyger Fitzpatrick and Zac Lorschy.
The information above is not financial advice. Youth Investment Group has no liability for personal financial interests or investment decisions. You should make your own investment decisions based upon your own research and what you believe is best for you.
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