Fisker Leaps on Initial Buy at Citigroup on Fundamentals

Fisker shares leaped on a buy initiation at Citi. The electric-vehicle maker's stock has more than doubled since it went public via a SPAC on Oct. 30.
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Fisker  (FSR) - Get Report shares leaped on Wednesday after Citigroup analyst Itay Michaeli began coverage of the electric-auto maker with a buy rating and a $26 price target, based on strong fundamentals.

Fisker shares recently traded at $19.97, up 25%. The stock has more than doubled since the Manhattan Beach, Calif., company went public via a special-purpose-acquisition company on Oct. 30.

Michaeli lauded Fisker’s "asset-light premium" electric-vehicle platform in a commentary cited by The Fly. The company plans to produce its first vehicle, the Ocean SUV, in the fourth quarter of 2022.

Fisker is smart to focus on SUVs and prices of $38,000 to $69,000, Michaeli said. 

The company has "significant upside potential" in its planned flexible leases, he said. That could produce lifetime vehicle revenue rather than one-time transactional revenue, as is common now, Michaeli said. 

Fisker has the potential to build a strong brand, he said, according to Bloomberg.

Earlier this month, Cowen analyst Jeffrey Osborne initiated coverage of Fisker with an outperform rating and $22 price target.

Fisker represents "the opposite of the ramp experience that Tesla  (TSLA) - Get Report witnessed," while it leverages Magna International  (MGA) - Get Report to produce vehicles "in a capital-expenditure-light manner," Osborne said. 

"Fisker has about 9,000 paid deposits for the Ocean, which fully covers our anticipated 2022 production."

"Fisker is building an 'experience center' in Los Angeles in May, as well as adding influencers and celebrities to help build the brand," he said. 

"We anticipate this will drive [the] deposit base higher in 2021 and serve as a catalyst for [the] shares in the pre-production period."