Cantor Fitzgerald Downgrades Polestar A Neutral from Overweight Rating

Cantor Fitzgerald Downgrades Polestar A Neutral from Overweight Rating

Polestar, the electric vehicle (EV) brand under Geely, experienced a shift in analyst sentiment recently, with Cantor Fitzgerald downgrading its rating from overweight to neutral [1]. This change comes amidst Polestar's release of its 2023 financial results, which showed a decrease in revenue and a significant increase in losses [2].

Cantor Fitzgerald analyst Andres Sheppard, who had previously maintained an optimistic outlook on Polestar, reiterated the firm's 12-month price target of $5 but changed the rating to neutral, stating, "Our 12-month $5 price target and Overweight rating are unchanged, pending a full model update" [1].

Despite the downgrade, Sheppard highlighted the potential risks that could impact Polestar's performance, including continued supply-chain disruptions, manufacturing constraints, high cost of goods sold, a highly competitive market, and slower-than-expected customer adoption [1].

Polestar's revenue for 2023 was $2.377 billion, a decrease of 3% from the previous year [2]. The company reported a loss of $414.7 million last year, a significant change from a profit of $98.4 million in 2022 [2]. The gross margin was also negative at -17.4% compared to positive 4.0% in the year before [2].

However, Polestar has been making strides in its product line. The company delivered the first units of the Polestar 3 at its headquarters in Gothenburg, Sweden, and introduced a new entry-level variant for the SUV with the launch of a new Long Range Single Motor variant [1]. Additionally, the company launched a refreshed Polestar 2, featuring design updates, a revamped pack structure, increased range, and more individual options [1].

Looking ahead, Polestar plans to launch one new electric vehicle per year, starting with Polestar 3, its first electric performance SUV, which is expected to debut in October 2022 [2].

In conclusion, while Cantor Fitzgerald's downgrade of Polestar from overweight to neutral may raise concerns, it is important to note that the analyst cited several potential risks that could impact the company's performance. Polestar's financial results for 2023 showed a decrease in revenue and a significant increase in losses, but the company has been making strides in its product line with the delivery of the Polestar 3 and the refreshed Polestar 2.

References:

[1] Afonso, C. (2023, September 10). Cantor Fitzgerald reiterates Polestar's price target ahead of Q1 earnings results. Electric Vehicles. https://eletric-vehicles.com/geely/polestar/cantor-fitzgerald-reiterates-polestars-price-target-ahead-of-q1-earnings-results/

[2] A Invest. (2023, September 10). Polestar A: Cantor Fitzgerald reiterates Overweight rating, target price is 3. A Invest. https://www.ainvest.com/news/polestar-a-cantor-fitzgerald-reiterates-overweight-rating-target-price-is-3-24091000d03e9f76c473b6e3/