Welcome to The Fly's latest edition of "Charged," where we look back at some recent analysts' notes, news and activity in the electric vehicle and clean energy space.
TESLA RESULTS, HERTZ ORDER: Shares of Tesla (TSLA) are in the spotlight on Monday after Morgan Stanley analyst Adam Jonas raised the firm's price target on the shares to $1,200, citing better-than-expected third quarter results and higher volume assumptions. Meanwhile, Hertz (HTZZ) announced an initial order of 100,000 Tesla vehicles valued at $4.2B in its first big push to electrify the company's fleet since it emerged from bankruptcy proceedings.
Last week, Tesla reported better than expected third quarter results. The company reported third quarter non-GAAP earnings per share of $1.86, with consensus at $1.58, and revenue of $13.76B, with consensus at $13.62B. Tesla said, "The third quarter of 2021 was a record quarter in many respects. We achieved our best-ever net income, operating profit and gross profit. Additionally, we reached an operating margin of 14.6%, exceeding our medium-term guidance of 'operating margin in low-teens'. Perhaps more impressively, this level of profitability was achieved while our ASP decreased by 6% YoY in Q3 due to continued mix shift towards lower-priced vehicles. Our operating margin reached an all-time high as we continue to reduce cost at a higher rate than declines in ASP."
SONO GROUP FILES FOR IPO: Sono Group N.V., the parent company to Sono Motors, announced that it has publicly filed a registration statement on Form F-1 with the Securities and Exchange Commission for an initial public offering for its common shares in the U.S. Sono Motors says it is developing "the world's first solar electric vehicle - SEV - for the masses, the Sion." Sono Motors says it has amassed more than 14,000 reservations with advance payments for the Sion. These vehicles will be produced through contract manufacturing with customer deliveries expected to begin in the first half of 2023.
XPENG TO GO BEYOND CARS: XPeng (XPEV) revealed a series of innovations at its annual 1024 Tech Day, including the latest version of its in-house developed advanced driver assistance system XPILOT 3.5 and XPILOT 4.0, the design of new generation road-capable flying car, major supercharging technology breakthroughs, and robotic innovations, forming the key components of the company's smart mobility ecosystem. In the first half of 2022, XPeng will be rolling out XPILOT 3.5, extending XPILOT's driver assistance system to support China's complex driving scenarios in major roads in the city. Meanwhile, planned for roll-out in the first half of 2023, the company said that XPILOT 4.0 is designed to deliver full-scenario driver assistance which can support point-to-point driving for customers. To maximize the utility of the 800V SiC platform, XPeng will also roll out lightweight 480 kW high-voltage supercharging piles with IP67 protection, and safety monitoring, delivering a superior safe and convenient charging experience for customers. Supporting this supercharging network, XPeng will also launch power storage facilities in both piles and mobile vehicles.
At the Tech Day, XPeng also unveiled the new generation flying car design developed by its affiliate Urban Air Mobility company HT Aero. The new model will be built on HT Aero's successful record of 15,000+ safe flights completed to date, fully in-house developed R&D, and multi-level safety redundancy design. Planned for roll-out in 2024, the new road-capable model will feature a lightweight design, and a foldable rotor mechanism for seamless fly-drive conversion. Additionally, XPeng said it foresees smart robots becoming an intelligent platform for the integrated smart mobility ecosystem.
ON THE SIDELINES: Stifel analyst Stephen Gengaro initiated coverage of Blink Charging (BLNK) with a Hold rating and $29 price target. While he believes Blink's established U.S. network and expansion into Europe positions it well amid an "expected surge" in EV charging infrastructure and that the company's focus on public charging "should help establish it as a leader in the public space," in the near-term the analyst sees the high capital spending required to fund growth and the uncertainty around public charging utilization as valuation headwinds.
SHARP RISE IN EV CHARGING INFRASTRUCTURE: Stifel analyst Stephen Gengaro initiated coverage of ChargePoint (CHPT) with a Buy rating and $29 price target. The analyst sees the company as "very well positioned" to benefit from the expected sharp rise in EV charging infrastructure over the next 10-20 years. ChargePoint's strong network coupled with its capital-light business model should enable it to start generating positive free cash flow as early as 2024, Gengaro told investors in a research note.
RISING ESTIMATE RISK: Guggenheim analyst Joseph Osha downgraded SolarEdge Technologies (SEDG), First Solar (FSLR), Shoals (SHLS) and Array (ARRY) to Neutral from Buy as he sees "risks to consensus expectations rising" and believes the stocks now appear fairly valued. Risks to 2022 revenue and earnings outlooks are rising, notably in utility and large-scale commercial solar, and these are not fully reflected in consensus estimates, Osha told investors in a research note. He thinks high input costs, particularly for steel, aluminum, labor and panels are beginning to impact 2022 project timing.
BUY FTC SOLAR, SELL ARRAY: Barclays analyst Moses Sutton upgraded FTC Solar (FTCI) to Overweight from Equal Weight with a price target of $9, down from $11, and downgraded Array Technologies to Underweight from Equal Weight with a price target of $15, down from $16. Shares of Array Technologies have outperformed those of FTC by 75% since July 1 and while he is "aware" of the Array margin recovery thesis, he expects it to come as a trade-off with market share. Ultimately, the analyst thinks the two companies narratives "look more correlated than price performance has implied."