3 Lucid Group Analysts Unpack Disappointing Q3 Print: 'No New Products' To Boost Margins

Shares of Lucid Group Inc LCID tanked in premarket trading on Wednesday, after the company reported disappointing third-quarter (Q3) results.

The results came amid an exciting earnings season. Here are some key analyst takeaways from the earnings release.

• Cantor Fitzgerald analyst Andres Sheppard downgraded the rating from Overweight to Neutral, while slashing the price target from $10 to $6.
• RBC Capital Markets analyst Tom Narayan reiterated a Sector Perform rating and price target of $6.
• Guggenheim Securities analyst Ronald Jewsikow maintained a Neutral rating on the stock.

Check out other analyst stock ratings.

Cantor Fitzgerald: Lucid Group not only reported a revenue miss for the third quarter, but also lowered its full-year production guidance from more than 10,000 to 8,000-8,500, Sheppard said in the downgrade note. “Recall that the company had previously revised its guidance on 5/8 to >10,000 vehicles (from the prior 10,000-14,000),” he wrote.
The analyst added that the rating downgrade reflected “lower expected revenues, persistent large negative gross margins, revision of the company's annual production guidance, and industry demand slowdown.”

RBC Capital Markets: The company’s reduced production guidance of 8,000-8,500 “was expected given only 6k produced through the first 9 months,” Narayan said. “Gross margin improved on lower revenue q/q driven by cost control programs including better inventory management, he added.

“We aren't seeing the upward momentum in demand necessary to reach consensus numbers,” the analyst further wrote.

Guggenheim Securities: Lucid Group’s third-quarter results “highlighted the ongoing challenges driving adoption for their flagship luxury electric sedan, the ASP impact of discounting and promotional activity, and a tempered production outlook reflective of macro-fueled product adoption challenges,” Jewsikow said.

“Overall, it remains challenging to be constructive on LCID near-term with no new products that will materially alter the growth/margin trajectory of the business until late 2024/early 2025,” he added.

LCID Price Action: Shares of Lucid Group lost 5.81% to reach $4.04 in premarket trading on Wednesday.

Image: Lucid