Why Lucid Stock Plunged 10% Ahead of Earnings
Shares of Lucid Group (NASDAQ: LCID) plunged below $3 Monday, and were down by 10% as of 2:30 p.m. ET. A significant analyst downgrade appears to have triggered the sell-off.
Redburn Atlantic analyst Tobias Beith downgraded Lucid stock to sell from neutral, slashing his price target from $3.50 a share to only $1.13 per share. That new target is 63% below the electric vehicle (EV) maker's closing price Friday.
Although Beith believes it won't be easy for Lucid's rivals to "replicate the efficiency" of its electric cars before 2030, the company will require huge amounts of cash to scale up production of the new mid-size platform it expects to launch next year. The analyst expects significantly higher cash outflows, to the tune of billions of dollars, for Lucid between 2025 and 2030.
Source Fool.com
