LMC stock downgraded to neutral by Goldman Sachs
Shares rebound one day after 1.1 percent drop
LORDSTOWN — Lordstown Motors Corp. stock rebounded some Friday, one day after it fell following investment bank Goldman Sachs’ announcement it downgraded the startup’s stock to neutral from buy.
Shares opened trading Thursday at $9.82 per share and closed at $9.71, a slip of about 1.1 percent. The price continued to fall in after-hours trading and opened Friday’s session at $9.56 per share. It closed Friday at $9.94 per share, up 23 cents, or 2.4 percent, from Thursday’s close.
The New York City-based financial services firm lowered the rating Thursday along with with its 12-month price target to $10 from $21, citing recent issues Lordstown Motors had at the SCORE San Felipe 250 Baja race on April 17.
The issues “suggests to us that there could be more development work to do on the powertrain than we had expected,” a report from Goldman Sachs states. “This factor, coupled with the global auto supply chain challenges that are making it difficult to obtain parts, could increase the probability that the company’s market entry will be delayed and / or could occur at a more measured pace than we had expected.”
Lordstown Motors entered an off-road version of its battery-powered truck, the Endurance — production of which is targeted to start in September — into the race, but stopped after the first stage when data showed energy consumption was greater than the company had anticipated. The truck completed 40 miles of the 280-mile race.
Because the second leg contained mountainous terrain unsuitable for a battery fast-charger, Lordstown Motors stopped. The truck, according to the company, finished the stage intact and operationally sound.
Goldman Sachs also cited concern for increasing competition in the auto industry, but noted the company has the opportunity to be successful long-term because of its focus on fleets in the electric vehicle market and “its vehicle integration and use of hub motors could allow it to differentiate itself.”
Also, taking over the former General Motors assembly plant and equipment and access to GM’s parts catalog can provide efficiencies, the report states.