Fisker could jump another 116% due to rising reservations and an EV boom, BofA says

Fisker Ocean
The Ocean. Fisker

Fisker is “standing out even with plenty of fish in the ocean of new EV automakers,” Bank of America says.

In a note to clients on Tuesday, Bank of America initiated coverage on shares of Fisker with a “buy” rating and a $31 price target.

The price target implies a potential ~116% rise from Tuesday’s intraday high of $14.45 per share.

Analysts led by John Murphy, CFA, said they believe rising reservations and a boom for the EV industry as a whole will help boost Fisker moving forward.

“Our Buy rating on Fisker is predicated on our view that the company is a beneficiary of, although still one of many participants within, the automotive industry evolution towards electrification,” Murphy wrote.

Murphy’s team said their latest estimates for Fisker’s Ocean SUV reservations hit more than 14,000 recently and that they expect production for the vehicle to start by the end of 2022.

Fisker will follow its new, all-electric SUV with three more EV models through 2025.

The Ocean SUV is expected to have a range of between 250 and 483km, accelerate to 60 mph in 2.9 secs (in its quickest version), and start at $37,499.

Fisker also offers lease-like subscription plans which are expected to cost $379 per month for 48,280km each year, including maintenance and service.

The Bank of America team highlighted the Fisker-Flexible Platform Adaptive Design (FF-PAD) in their note to clients on Tuesday as well. The FF-PAD is a proprietary design that allows Fisker to utilize third-party EV platforms and outsource its manufacturing to the likes of Foxconn and Magna.

Murphy and his team said the flexible leading program and FF-PAD design method of Fisker are “compelling,” but the firm’s business model may be “overly complicated.”

The Bank of America analysts also noted Fisker faces some serious competition in the now-crowded EV industry, and that Autotech entrants are “riskier investments than auto incumbents.”

Fisker went public in October 2020 through a reverse merger with a special purpose acquisition company (SPAC) called Spartan Energy.

Shares of the EV maker have slumped more than 50% over the past six months amid competition in the now-crowded industry.

Despite its recent slump, Fisker holds five “buy” ratings, three “neutral” ratings, and just one “sell” rating from analysts.

The firm’s stock traded up 3.60% as of 1:14 p.m. ET on Tuesday.

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