Lordstown Motors' Endurance pickup truck was unveiled last June.
Matthew Hatcher/BloombergInvestors weren’t subtle in showing how disappointed they are in the new production plans put out by Lordstown Motors : Shares of the electric vehicle start-up tumbled double digits on Tuesday—and Wall Street piled on with a downgrade and lower price targets.
Lordstown’s first-quarter earnings report, released Monday night, is what catalyzed the decline—a little more than 11% in midday trading, compared with small upticks for both the Dow Jones Industrial Average and S&P 500.
The auto maker doesn’t have sales yet so losses aren’t as important as coming production. On that front, though, Lordstown management slashed this year’s numbers for its all-electric Endurance light-duty pickup truck and told investors that the company was probably going to need more money down the road.
In response to the update, R.F. Lafferty analyst Jaime Perez downgraded the stock to Hold from Buy. His target price dropped to $9 a share from $35. Perez laid out his reasons in a Tuesday report: “The decline in price target reflects our lower revenue estimates for 2021 and 2022, which assumes that ramping up production will depend on Lordstown’s ability to raise more capital.” Other problems he listed—higher start-up costs, higher parts costs and supply shortages such as semiconductors and plastics.
Goldman Sachs analyst Mark Delaney also lowered his price target, to $8 from $10. He rates shares Hold. He cited higher costs and delays in his report, too. “We believe there were incremental negatives from the report regarding the company’s ability to meet its financial targets,” wrote the analyst.
Lordstown projected $118 million in 2021 sales and $1.7 billion in 2022 sales when it was going through the process of merging with a special-purpose acquisition company in 2020. Delaney projected about $22 million in 2021 sales and $535 million in sales in 2022.
Morgan Stanley analyst Adam Jonas also has an $8 price target, down from $12. His rating, however, is Sell. He wasn’t impressed by the report either. “While there is some glimmer of strategic value, we believe investors are exposed to outsized company and market risk,” wrote Jonas. He isn’t sure Lordstown will make it in the long run.
There are still bulls. BTIG analyst Greg Lewis rates shares Buy and has a $20 price target, which is down from $40 that he set in early March. Lewis was pleased that Lordstown has completed important crash tests, although the testing cost more than he expected.
Lewis also pointed out that a strategic investor—even another auto maker, also know in the industry as an original equipment manufacturer—might be willing to take a stake. “We believe [one] could include existing suppliers, a new entrant in the space, an existing OEM without an EV footprint, or even a customer.”
An investor might be needed to get the stock out of its funk. Shares are down 74% from their 52-week high. Needing cash to get to profitability will keep investors on the sidelines—at least until more cash arrives.
Write to Al Root at allen.root@dowjones.com
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