Fisker’s Accelerating “Volumes” and Bank of America’s Bullish Outlook

We review the latest research note out from Bank of America analyst John Babcock as he shares an optimistic take regarding Fisker’s recent production milestone.

Fisker Oceans driving through New York City earlier this month.
Fisker Oceans driving through New York City earlier this month.

Today, we reviewed a research note from Bank of America Securities authored by analyst John Babcock, who resumed coverage of Fisker shares. Babcock, the equity analyst, believes that the accelerating volumes of the Fisker Ocean will serve as a “key catalyst” for Fisker stock. He stated, “Ultimately, the ramp in volumes should get Fisker to EBITDA breakeven in 2024.” The Bank of America analyst added that Fisker provides investors with “pure-play exposure to the rapidly growing EV market” and possesses a lower-risk business model compared to its peers. Consequently, he gave a ‘Buy’ rating upon Fisker shares and established a 12-month price target of $8 per share.

This Bank of America research note followed closely on the heels of Fisker achieving a production milestone. Yesterday morning, Fisker, in partnership with Magna Steyr, announced the production of 5,000 Fisker Ocean electric SUVs. The company also reported progress in Fisker Ocean deliveries and strong demand for its electric SUV. As mentioned yesterday, Fisker and Magna have assembled an impressive 1,877 electric vehicles in less than 20 days and have delivered a total of 900+ Oceans to customers worldwide.

Henrik Fisker’s Emphasis on Volumes

Last night, Henrik Fisker shared photos of a group of Fisker Oceans in various settings on social media. The photos depicted Fisker Oceans cruising through Time Square in midtown Manhattan at night while taking a break from the recent East Coast test drive event in New Jersey. His caption on the photos seemed to echo that of Bank of America analyst emphasizing “Volumes! …Fisker Ocean EVs.” Apparently, he must have read the research note to clients too!

Henrik went on to share the following:

“We produced 5000 cars! at ANY start-up production is the number 1 problem! We don’t have that problem: [highest] quality cars! Especially coming out of COVID! Deliveries is a factor of 3 things:

  1. Logistics: we take long to get cars from Europe to US
  2. People finalizing their financing
  3. Our real estate where we can deliver cars in 50 states!

We need to improve! And we are moving fast! We will even cut some corners and deliver from large parking lots and then do super innovative onboarding virtual: that evening! Which we have already done and tested! Exciting times!”

Analyst Price Targets Amidst Volatility

Since the release of Fisker’s Q2 2023 results, notable adjustments have been made to analyst price targets. Wall Street analysts have lowered each 12-month price target that we’ve observed. For example, R.F. Lafferty reduced its 12-month price target for Fisker stock from $10 to $9 per share, and Barclays analyst Dan Levy lowered his 12-month target from $6 to $5 per share. On August 17th, Citi also revised its price target for Fisker stock from $18 to $15 per share. Since Fisker’s last quarterly results, shares have traded as low as $5.25 and as high as $7.05 per share. Currently, Fisker shares are trading at $5.91 per share, up $0.09 (+1.63%), with 6.55 million shares changing hands.

Fisker’s Path in the Evolving EV Market

In summary, Fisker is navigating a dynamic landscape of fluctuating analyst opinions, significant production achievements, and growing demand for its electric SUVs. The company’s focus on scaling up production volumes, as emphasized by both analysts and the Chairman & CEO, Henrik Fisker, is primed to be a pivotal factor influencing the future course of Fisker’s stock in the rapidly evolving landscape of the electric vehicle market.

We have ownership interests in Fisker Inc (NYSE: FSR). It's important to emphasize that the information presented in our articles is general in nature and should not be considered personalized financial advice.

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