Fisker (NYSE:FSR) stock has seen a volatile month of trading, declining 12.22%. Fisker peaked investor interests early last year, after announcing its intentions to merge with Spartan Energy Acquisition (SPAQ). In fact, the proposed merger was one of the most talked about SPAC propositions in 2020. Furthermore, Wallstreet has remained relatively bullish on FSR stock. Analyst Adam Jonas from Morgan Stanley suggests the stock could reach $40 over the next 12 months. This article will breakdown everything you need to know about the Fisker stock forecast.
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Analysts remain bullish on Fisker’s stock forecast
Firstly, across the board of 9 Wallstreet analysts the average 12 month price target is set at $26.40 a share. This suggests an average upside of 76% from the current trading price. In addition, out of the 11 analysts 7 have listed a Buy rating on the stock. The following price targets are the most recent to date, which show the current consensus amongst “smart money” institutions:
Royal Bank of Canada sets $27 target
RBC Capital analyst analyst Joseph Spak initiated coverage on Fisker with a $27 price target. The analyst noted the company has “A differentiated business model that takes a clean sheet BEV approach and leverages well-regarded manufacturing partners to become an asset-light, lean cost structure auto company and hasten FSR’s product speed to market”according to StreetInsider.
Goldman Sachs downgrades rating
Morgan Stanley remains the biggest Fisker bull
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.
“We reiterate our OW rating and $40 price target which offers 300% upside from the current price. Our $90 bull case offers 800% upside from the current price which we believe could be a reasonable level of appreciation relative to the associated industry, competitive, technological and execution risks” noted Analyst Adam Jonas according to StreetInsider.
Financial forecasts for Fisker (NYSE:FSR)
Firstly, it’s 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 Q1 earnings reinforced Fisker’s strong cash position of $985 million, as a result of net proceeds from the SPAC merger. The net proceeds will support “Fisker’s product development, working capital and capital expenditure requirements.” Furthermore, Fisker noted in May that they have now surpassed 16,000 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. FSR expects this to multiply to $3.3 Billion in 2023 and $10.6 Billion in 2024 according to a investor presentation. The company also expects to generate $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 at this stage.
What’s in the pipeline for Fisker?
The company expects to make 225,000 vehicles by 2025 according to Barron. The vehicles will be manufactured by their partner Magna in Europe. In addition, Fisker has recently signed a framework agreement with Foxconn to begin manufacturing of a new breakthrough EV model in 2023. The framework will allow Fisker to access Foxconn’s deep array of supply chain networks, including their ability to reliably source Semiconductor chips.
“Our partnership with Foxconn enables us to deliver those industry firsts at a price point that truly opens up electric mobility to the mass market.” Fisker Chairman and Chief Executive Officer, Henrik Fisker
Furthermore, the company plans to sell the Ocean model from $37,500 which is competitive in the SUV EV market. 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.
Summary – Fisker stock forecast
In summary, the Wallstreet price targets and revenue forecasts provide an argument for the bulls. In particular, the bullish thesis from Morgan Stanley suggests strong upside from the current trading price . However, the delay in market entry as noted by Goldman Sachs may play at the disadvantage of the company in the long run.
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.