Institutional investors and professional traders rely on The Fly to keep up-to-the-second on breaking news in the electric vehicle and clean energy space, as well as which stocks in these sectors that the best analysts on Wall Street are saying to buy and sell.
From the hotly-debated high-flier Tesla, Wall Street's newest darling Rivian, traditional-stalwarts turned EV-upstarts GM and Ford to the numerous SPAC-deal makers that have come public in this red-hot space, The Fly has you covered with "Charged," a weekly recap of the top stories and expert calls in the sector.
TESLA RESULTS: Tesla (TSLA) reported on Wednesday, April 20, first quarter earnings per share of $3.22 and revenue of $18.76B, both better than the expected $2.26 and $17.8B, respectively. Tesla said in its quarterly update letter that the first quarter of 2022 was "another record quarter for Tesla by several measures such as revenues, vehicle deliveries, operating profit and an operating margin of over 19%." The company added that public interest in a sustainable future continues to rise, and we "remain focused on growing as fast as is reasonably possible."
"Challenges around supply chain have remained persistent, and our team has been navigating through them for over a year. In addition to chip shortages, recent COVID-19 outbreaks have been weighing on our supply chain and factory operations. Furthermore, prices of some raw materials have increased multiple-fold in recent months. The inflationary impact on our cost structure has contributed to adjustments in our product pricing, despite a continued focus on reducing our manufacturing costs where possible."
"We plan to grow our manufacturing capacity as quickly as possible. Over a multi-year horizon, we expect to achieve 50% average annual growth in vehicle deliveries. The rate of growth will depend on our equipment capacity, operational efficiency and the capacity and stability of the supply chain. Our own factories have been running below capacity for several quarters as supply chain became the main limiting factor, which is likely to continue through the rest of 2022. We have sufficient liquidity to fund our product roadmap, long-term capacity expansion plans and other expenses. While we continue to execute on innovations to reduce the cost of manufacturing and operations, over time, we expect our hardware-related profits to be accompanied with an acceleration of software-related profits. The pace of production ramps in Austin and Berlin will be influenced by the successful introduction of many new product and manufacturing technologies in new locations and ongoing supply chain related challenges. Factory ramps take time, and Gigafactory Austin and Gigafactory Berlin-Brandenburg will be no different. We are making progress on the industrialization of Cybertruck, which is currently planned for Austin production subsequent to Model Y ramp," Tesla stated.
ELECTRIC CHEVROLET CORVETTE: General Motors (GM) President Mark Reuss said the company will produce an electrified Chevrolet Corvette next year, followed by an all-electric version of the iconic sports car, CNBC's Michael Wayland wrote. Reuss told CNBC’s Phil LeBeau during an interview on "Squawk Box" that the automaker will continue to manufacture traditional models with internal combustion engines alongside the electrified models. He declined to disclose when the all-electric Corvette would be released or whether the “electrified” model would be a traditional hybrid or plug-in hybrid electric vehicle.
LINCOLN STAR CONCEPT DEBUT: Ford's (F) Lincoln announced the Lincoln Star Concept debuted globally. "This is a shining example of what happens when we combine Lincoln luxury with flexible electrical architecture to create unimaginable experiences for customers," said Jim Farley, president and CEO, Ford Motor company. "We can truly revolutionize how people engage with the brand and scale it across an exciting lineup of products that catapult Lincoln into the digital, connected age." By mid-decade, Lincoln plans to deliver three new fully electric vehicles, EVs, meaning more than half of its global volume will be zero emissions vehicles, and it will add a fourth by the end of 2026.
WALMART AGREEMENT: Plug Power (PLUG) announced an agreement with Walmart (WMT) for an option to deliver up to 20 tons per day of liquid green hydrogen to power material handling lift trucks across Walmart distribution and fulfillment centers in the U.S., marking an additional step the retailer is taking to incorporate alternative zero-carbon energy sources throughout Walmart's supply chain. This is one of the first green hydrogen supply contracts for Plug.
B. Riley analyst Christopher Souther kept a Buy rating on Plug Power with a $31 price target following the news. Walmart is now one of Plug's first green hydrogen supply customers, "representing solid validation" for its investments and strategy to expand its green hydrogen ecosystem, Souther told investors in a research note. The analyst expects the deal is "likely very competitive" with the price the company currently charges for hydrogen supply given Walmart's reputation for being cost sensitive, but notes that in discussion at the branding event, management seemed optimistic about the Walmart agreement having a strong margin profile. This suggests Plug's trajectory for low cost green hydrogen production is playing out as planned, "which is a key positive," Souther wrote.
SELL VOLTA: Goldman Sachs analyst Mark Delaney downgraded Volta (VLTA)to Sell from Neutral with a price target of $2, down from $3. The analyst cited a combination of macroeconomic, margin, and balance sheet risks, noting that the majority of Volta's revenue coming from advertising at EV charging stations and there in an increased risk of a recession, which typically reduces advertising spend. Delaney added that Volta peers have commented on supply chain and input costs pressuring margins, which could impact both cash flow and P&L margins.
WEAKER GROWTH OUTLOOK: Piper Sandler analyst Kashy Harrison downgraded FTC Solar (FTCI) to Underweight from Neutral with a price target of $3, down from $4, citing a weaker growth outlook. The analyst sees an above average probability that FTC cuts guidance when reporting first quarter results as the company's initial outlook "incorporated a soft-landing" on antidumping and countervailing duties. Bookings had already meaningfully decelerated before the investigation was announced and have probably halted since then, Harrison told investors in a research note.
EUPHORIC STAGE DECIDEDLY OVER: GLJ Research analyst Gordon Johnson downgraded SunPower (SPWR) to Sell from Hold with a $6.99 price target, which represents 61% downside from current share levels. The "euphoric stage" rooftop solar investors were in for the majority of 2021 and the beginning of 2022 is "decidedly over," Johnson told investors in a research note. The analyst believes SunPower's move to become a solar subprime lender means higher interest rates are its "kryptonite."
Tesla
-5.07 (-0.50%)
General Motors
-0.94 (-2.36%)
Ford
-0.27 (-1.80%)
Plug Power
+0.23 (+1.04%)
Walmart
-1.715 (-1.09%)
Volta
+0.105 (+4.77%)
FTC Solar
-0.055 (-1.82%)
SunPower
-0.375 (-2.09%)