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Wall Street split on Lucid despite LCID stock climbing 90% in a month

Wall Street split on Lucid despite LCID stock climbing 90% in a month
Jordan
Major
1 day ago
5 mins read

Lucid Motors (NASDAQ: LCID) had a solid start to the week after announcing its third-quarter financial results and further information on vehicle reservations.

Almost everyone’s attention has been focused on Lucid since the company started shipping its first car, the Air Dream Edition, which surpassed the longest-range Model S from Tesla (NASDAQ: TSLA) by more than 100 miles. However, although there are encouraging indicators in the most recent events, the medium-term picture is still mixed. 

In the previous month, the price of LCID has fluctuated between $28.08 and $57.75, which is a significant variation. In terms of price, it is now trading around the upper end of this range. Notably, the volume has increased significantly during the previous few days as Lucid’s price has climbed.

LCID is presently trading in the higher portion of its 52-week trading range; the S&P 500 Index, on the other hand, is now trading near a new high, indicating that LCID is slightly behind the market.

LCID stock price chart. Source: Finviz data

Lucid chart analysis

Currently, Lucid stock does provide a decent setup pattern. Price consolidation has occurred recently, and volatility has been lessened as a result. Above the present price, there is very little resistance to overcome.

We detected two crucial support levels for traders wanting to enter the market. The first support area is noticed at $27.56 from a trend line in the daily time frame. Meanwhile, on the daily time frame, a horizontal line provides support of around $22.63.

Last week, we reported that, despite Lucid’s disappointing earnings, the stock has continued to rise, indicating that positive short-term momentum is developing for the company based on its recent performance and a price that is above both short-term moving averages; at the time, the company’s stock was trading 77% above its 20-day moving average line.

Fast forward to this week, and Lucid is presently trading at $52.57, much above its 20-day and 50-day simple moving averages, which stock trading investors often use to identify uptrends in the market. 

Given that Lucid is up 94.56% on its 20-day SMA and 144.88% on its 50-day SMA, it looks that the firm’s short-term bullish momentum may drive it beyond $55 following a rebound from a minor dip during the week.

Wall Street analysts predict

Elsewhere, 3 Wall Street analysts have given Lucid a high price target of $60 and a low forecast of $16 for the next 12 months. On average, the analysts project a $44.43, representing about a 15.67% drop from the current LCID price.

LCID analysts’ price target. Source: TipRanks.com

In general, the three TipRank experts are moderate on the stock’s prospects, with two recommending to “Buy” while the other analyst advocates to “Sell”.

In comparison, the consensus price target for Lucid, according to the three CNN Business analysts who provide 12-month price estimates, is $57.00, with a high estimate of $60.00 and a low estimate of $16.00. The consensus estimate implies an increase of $8.26 over the previous closing price of $52.65. 

Lucid stock forecast. Source: CNNBusiness

Lucid’s future looks bright

Though investors focused on Lucid’s third-quarter earnings release, which included only reservation and production figures, investors needed to read between the lines in the company’s earnings conference call, which disclosed a great deal more about the company’s future plans and prospects.

Wall Street anticipates that the company will generate $1.7 billion in revenue in 2022, which is good news for investors and one of the reasons why the stock price has climbed again in recent weeks. 

Moreover, at the end of the third quarter, the company had 13,000 reservations for vehicles, representing about $1.7 billion in potential sales. That figure had risen to 17,000, putting them in line to meet Wall Street analysts’ forecasts for 2022. 

After everything is said and done, Lucid is now trading at a price around 40 times its estimated 2022 sales, as investors are enthused by the delivery news and seem to have high hopes for CEO Peter Rawlinson and the rest of the company. 

Lucid order book reveals car model interest

It’s worth mentioning that during its third-quarter earnings call, Lucid said that their order book, which included 13,000 vehicles as of the end of September, was worth around $1.3 billion. In terms of pricing, it corresponds to a vehicle costing around $100,000, which is roughly the mid-point between the costs of all four versions of its vehicles (Air Pure, Air Touring, Air Grand Touring, and the Dream Edition.)

Lucid looks to be generating a very balanced order book across all of its models, which is quite promising for a startup that is just getting its feet wet in the hot electric vehicle market. 

Ultimately, investors and analysts alike are eager to learn more about the company’s plans to ramp up production, as well as the anticipated delivery dates in the fourth quarter and early in 2022.

Disclaimer: The content on this site should not be considered investment advice. Investing is speculative. When investing, your capital is at risk.

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Jordan Major
Author

Jordan is an investor and market analyst. He's passionate about stocks, ETFs, blockchain, and digital assets. At Finbold.com, he delves into the technicalities to obtain future trends for new market traders and gives insights into user-friendly platforms for beginners.

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