Lucid (LCID) Stock Wins a New Street-High Price Target

Business Insider

4 days ago

Lucid Group (NASDAQ:LCID) stock has taken a beating over the past few years, a reflection of the luxury EV maker's uphill battle to gain consumer traction. Sentiment has been weighed down by sluggish sales, high cash burn, and uncertainty around its long-term viability.
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That narrative took a sharp turn last Thursday, when shares jumped over 30% on news of a landmark partnership. Lucid is teaming up with Uber and autonomous vehicle startup Nuro to deploy 20,000 Gravity SUVs equipped with Nuro's self-driving system over the next six years.
Underscoring the significance of this collaboration, Uber's subsidiary, SMB Holding, is also committing $300 million to Lucid through a private placement. The investment, priced based on LCID's 30-day average, will come with an 18-month lock-up, reinforcing long-term commitment. The first vehicles could hit the road as early as 2026, with final deal terms expected later this quarter.
Benchmark analyst Mickey Legg didn't mince words in reacting to the announcement: 'We view the partnership as a clear strategic win, bringing in capital and two world-class partners while expanding Lucid's reach into autonomous ride-hailing.'
Beyond the cash infusion, the partnership positions Lucid at the forefront of a high-growth frontier. Management views autonomous ride-hailing as a multi-trillion-dollar market opportunity, and with Uber facilitating 34 million daily trips in over 70 countries, Lucid gains immediate global exposure – without the burden of operating its own fleet. Vehicles will be owned by Uber or its partners and fully integrated into the Uber app. A working prototype is already undergoing tests at Nuro's Las Vegas site, pointing to real-world deployment on the horizon.
As Legg put it, 'This initiative validates the Gravity platform, broadens Lucid's commercial strategy, and enhances monetization optionality for its proprietary technology.'
In tandem with this strategic pivot, Lucid also announced a proposed 1-for-10 reverse stock split, aimed at making the stock more attractive to institutional investors. Shareholders will vote on the move on August 18. Legg called the proposal a 'prudent step,' particularly in light of recent operational progress and renewed investor interest.
'We are impressed with the progress the new management team has already enacted and look forward to further transparency regarding the path to profitability,' the analyst summed up.
How High Can Lucid Stock Go?
Depends on who you ask. Legg is clearly betting on a turnaround – he boosted his price target from $5 to a Street-high of $7, suggesting a potential 130% upside from current levels. Backing that view, he rates LCID shares a Buy. (To watch Legg's track record, click here)
But Legg's optimism stands out in a crowd that's mostly playing it safe. While he sees upside, most analysts remain cautious. Lucid carries 8 additional Hold recommendations and 1 Sell, resulting in a consensus Hold (i.e., Neutral) rating. At $2.92, the average price target suggests the shares will remain range-bound for the foreseeable future. (See LCID stock forecast)
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