Shares of Fisker Inc. (FSR) remained stable at $17.30 on Thursday but has lost -19.94 percent over the week, setting off the solid double-digit growth momentum attained by the stock in past week.
Stock’s price last week grew about 35 percent largely because of the recommendation initiated by investment bank Citigroup for the proper placement of electric vehicles by Fisker raising its stock price to $21.61 on November 25. But afterwards company continuously lost in past 5 sessions.
In mid-November, Fisker shares gained more than 30 percent after a supportive statement from investment Bank Cowen. At the time, the company’s market capitalization was around $1 billion. A comment from Citigroup last week led to an even greater rise. The prospects for Fisker’s automotive business were presumably appreciated by Wall Street.
Citigroup analyst Itay Michaeli said Fisker is targeting premium crossovers, the right segment of the market. The analyst calls the prices feasible for the first model of Fisker Ocean.
It is assumed that it would cost around $38 thousand for the standard version of Ocean, and $69 thousand for the full configuration. At the same time, as the automotive industry enters the age of flexible leasing transactions, Citigroup sees huge growth opportunities for investors. With leasing, by selling cars to buyers who do not have the funds for the full cost or down payment, Fisker will greatly expand the targeted market. Against this backdrop, a “Buy” recommendation for FSR shares and a target price of $26 was initiated by Citigroup.
There is an elevated degree of risk for investments in Fisker so far as the company does not manufacture electric vehicles. The Fisker Ocean launch is expected to take place in the fourth quarter of 2022. Unlike Tesla, however, Fisker Inc. (FSR) has no intention of developing its own large-scale development. Instead, Fisker-branded cars will be manufactured at the automotive parts supplier Magna International’s manufacturing facilities. This would eliminate several issues with the initial production deployment, which forced Tesla to incur high financial and operational costs.