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Morgan Stanley bursts into EV space; Offer 2 shares to buy
We are indeed living in interesting times – and in many ways that is a good thing. Take the automotive industry for example. Technology is changing at a rapid pace and, when it takes hold, it will radically change the way we drive. By 2030, our concept of “car” will probably be unrecognizable to drivers from 1980 onwards. The biggest changes come from power systems and artificial intelligence. AI will bring autonomous technology to our cars, making autonomous vehicles a reality. But changes in electrical systems will affect us first. In fact, electrically powered vehicles are already on our roads, and electric vehicle (EV) companies are proliferating rapidly. At the moment, there are several avenues to potential success in the electric vehicle market. Companies strive to position themselves as leaders in battery or electric powertrain technology, or to maximize their range and performance per charge. It is a factual-paced industrial environment, offering both opportunities and enthusiasm for investors. Savvy investors will look for companies that can meet the demands for scale, once they choose marketable models. Investment firm Morgan Stanley is watching the EV industry, looking for new, innovative design and production companies that position themselves for gains as the market matures. The company’s auto analyst, Adam Jonas, selected two stocks that investors should seriously consider buying into, saying, “As we examine the EV / battery startup landscape, we prioritize one technology and / or to highly differentiated business models with a reasonable level of risk evolution path. By opening up the TipRanks database, we’ve put the details of Jonas’ two picks together to see if they might be right for your portfolio. Fisker (FSR) First, Fisker is based in Southern California, the epicenter of so many of our revolutionary technology industries. Fisker focuses on solid-state battery technology, a growing alternative to lithium-ion batteries on which most electric vehicles depend. Although more expensive than older lithium-based systems, solid-state batteries are safer and offer higher energy densities. Fisker has been in the process of patenting his movements in solid-state batteries, a solid strategy to lock in his advances in this area. For electric vehicles, solid-state batteries offer faster charge times, longer range per charge, and potentially lower weight – all important factors in vehicle performance. Every automaker needs a flagship model, and Fisker has the Ocean – an EV SUV with an average price ($ 37,499) and a long-range power system (up to 300 miles). The vehicle features a sleek design and room-mounted solar panels to complement the charging system, and is expected to go into series production for markets in 2022. The sleek design reflects the sensibilities of the company’s founder, renowned Henrik Fisker for his work on the BMW Z8 and Aston Martin DB9. Fisker entered public markets through a PSPC merger deal last fall. Since the closing of the SPAC transaction on October 29, FSR’s shares have increased by 112%. Jonas of Morgan Stanley is impressed with this company, describing the “Fisker value proposition” as “… design, time to market, user experience and management expertise” and stating that the timeline for launch of 4Q22 for the Ocean is likely to be met. “Fisker specifically targets the passenger / passenger car industry as opposed to the commercial end markets, where emotional design and user experience are more important. In addition, the company wants to create a fully digital experience from website to app to car HMI and continued customer engagement through its flexible rental product, ”added Jonas. In keeping with his bullish outlook on the company (and the car), Jonas attributes Fisker an overweight (i.e. a buy) and sets a price target of $ 27 suggesting a 42% increase for the coming year. (To look at Jonas’ track record, click here) When it comes to TipRanks data, we’ve found that Wall Street analysts have a range of views on Fisker. The stock has a Moderate Buy analyst consensus rating, based on 7 reviews, including 4 buy, 2 take and 1 sell. The shares are currently priced at $ 18.99, and the average price target of $ 21.20 implies a one-year hike of around 12%. (See FSR stock market analysis on TipRanks) QuantumScape (QS) Where Fisker is working on solid-state batteries in the context of vehicle production, QuantumScape is positioning itself as a leader in EV battery technology and a potential supplier of the next generation of battery and power systems for the EV market. QuantumScape designs and manufactures lithium-metal solid-state batteries, the highest energy density battery system available today. The main advantages of the technology are safety, service life and charging times. Solid-state batteries are non-flammable; they last longer than lithium-ion batteries, with less loss of capacity at the anode interface; and their composition allows faster charging, 15 minutes or less to reach 80% capacity. QuantumScape is betting that these benefits will outweigh the current higher cost of the technology and set a new standard in power supply systems. The company’s strongest connection to the field of electric vehicle production is its connection with Volkswagen. The German auto giant invested $ 100 million in QuantumScape in 2018 and an additional $ 200 million in 2020. The two companies are using their partnership to prepare for the development and large-scale production of solid-state batteries . Like Fisker, QuantumScape went public through a PSPC deal late last year. The deal, which ended on Nov. 27, placed the QS symbol on public markets – where it quickly passed $ 130 per share. Although the stock has since slipped, it is still up 47% from its opening on NYSE. For Morgan Stanley’s Jonas, getting involved in QS action comes with high risk, but also with high potential for reward. In fact, the analyst calls it “battery development biotechnology”. “We believe their solid state technology solves a very big hurdle in battery science (energy density) which, if successful, can create extremely high value for a wide range of customers in the automotive industry. and beyond. The risks of moving from a single cell layer to a production car are high, but we believe these are outweighed by the commercial potential and Volkswagen’s role in helping secure the early manufacturing ramp, ”explained Jonas . Noting that QS is a long-term stock, Jonas rates stocks as overweight (i.e. buy), and his price target of $ 70 indicates confidence in a 28% rise for a horizon of. a year. Granted, not everyone is as enthusiastic about QS as Morgan Stanly. QS’s Hold consensus rating is based on an equal split between buy, hold and sell ratings. The shares are priced at $ 54.64 and their recent appreciation has pushed them well above the average price target of $ 46.67. (See QS Stock Analysis on TipRanks) To get great ideas for EV stocks traded at attractive valuations, visit TipRanks Best Stocks to Buy, a newly launched tool that brings together all the information about TipRanks stocks. Disclaimer: The opinions expressed in this article are solely those of the analyst presented. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.
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