Although its 2021 initial public offering (IPO) attracted plenty of attention, Lucid Motors has seen consistent struggles with profitability and production thus far.
With that said, Lucid stock (NASDAQ: LCID) rose to a five-month and year-to-date (YTD) high of $3.45 on February 18 following better than expected production and delivery results for Q4. This was the first instance in which the automaker outpaced its own guidance since 2022 — however, this did not garner sufficient bullish momentum to overpower investor concerns.
The company’s chief executive officer (CEO) Peter Rawlinson unexpectedly announced his departure from the luxury electric vehicle (EV) company during its Q4 and FY 2024 earnings call on February 25. Despite seemingly endless backing from Saudi Arabia’s Public Investment Fund (PIF), analysts have concerns surrounding the company’s financials — and, on average, they predict limited upside in 2025.
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Unexpectedly enough, from March 13 to press time on March 20, the price of Lucid stock increased by 19.21%, from $2.03 to $2.42.
Moreover, March 18 marked a five-month high in terms of the stock’s trading volume, which reached 175 million shares, per data retrieved by Finbold from market intelligence platform Market Chameleon.
So — does this 19.21% rally on such strong volume augur a change of fortune for Lucid stock? Let’s take a closer look at some of the prevailing factors impacting price action.
Will the Lucid stock rally continue?
For one, this latest development establishes a high level of demand in the $2.16 to $2.35 range. Barring a significant bearish development or a continuation of the market-wide downturn, it’s less likely that Lucid stock will retreat below the lower end of that range in the short term.
As we noted earlier, the average price target for LCID shares predicts limited upside. However, we also have to take into account that two of the most recent revisions were quite positive.
On March 12, Benchmark analyst Mickey Legg reiterated a ‘buy’ rating originally set on February 12, with a $5 price target, after a meeting with the company’s management. This forecast implies a 106.61% upside.
Six days later, Morgan Stanley equity researcher Adam Jonas reiterated a much more conservative $3 price target — but upgraded Lucid stock from an ‘underweight’ or sell rating to an ‘equalweight’ rating, equivalent to a buy, citing artificial intelligence (AI) integration as a strong bullish catalyst going forward. If met, Jonas’ price target would equate to a 23.96% rally from current prices.
Interestingly enough, Finbold’s AI price prediction tool, which utilizes several of the most advanced large language models (LLMs) available, provided an average price target of $3 for Lucid stock by the end of March.
While the stock’s short volume ratio remains high at 53.54%, the figure still represents a significant drop from the 63% reported by Finbold on March 12. Readers should keep a close eye on this ratio in the near term, as it’s a handy shorthand for bearish sentiment.
Featured image via Shutterstock
