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QuantumScape and Fisker Soar as Morgan Stanley Is Bullish on Both

Fisker and QuantumScape surge after a Morgan Stanley analyst initiates coverage of the electric vehicle companies with overweight ratings.
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Fisker  (FSR) - Get Fisker Inc. Class A Report and QuantumScape  (QS) - Get QuantumScape Corporation Class A Report were surging Friday after a Morgan Stanley analyst initiated coverage of the electric vehicle companies with overweight ratings, while giving underweight ratings to Lordstown Motors  (RIDE) - Get Lordstown Motors Corp. Report.

Fisker was skyrocketing 22.7% to $18.95, while QuantumScape was climbing 21.4% to $54.63 in trading Friday.

Lordstown Motors, meanwhile, was sliding 12% to $27.06, and Romeo Power fell 5% to $16.82.

In a note titled "Expanding the EV Universe," Morgan Stanley analyst Adam Jonas set a $70 price target for QuantumScape, saying that it was among companies in the electric vehicle battery space offering "the most compelling strategies" and positive risk/reward skews.

Jonas added that the company has been developing "game changing" solid state cell technology and has achieved "promising results" with its patent ceramic separator.

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For Fisker, Jonas set a $27 price target on the shares, saying the company was a play on an all new, asset-light, design-centered EV business model that improves time to market and break-even points. 

Fisker stands out as one of the more de-risked and strategically underpinned business models, Jonas said.

The analyst said that Lordstown and Romeo Power "have interesting commercial potential, but we believe they may have less attractive growth rates and risk-rewards, leaving us underweight."

Jonas set an $18 price target for Lordstown Motors, saying the company is benefiting from a nearly free plant that was acquired from General Motors  (GM) - Get General Motors Company Report and a "highly experienced" management team with a plan to enter the commercial pickup market.

However, the analyst warned that Lordstown faces a flood of new competition in EV pickups from startups and legacy original equipment managers with far greater scale and distribution advantages.