Shares of electric car manufacturing hopeful Fisker (NYSE: FSR) tumbled 4.5% through 11:50 a.m. ET this morning, erasing much of the gains won on Monday after Fisker announced a deal to convert about $185 million of its half-billion-dollar debt load into equity -- lowering its interest costs in the process.
Investors liked that news, bidding Fisker stock up nearly 18% on Monday. They're less happy with today's news, though: British banker Barclays just cut its price target on Fisker stock by 75%.
Barclays barks at Fisker
The news isn't quite as bad as that sounds. Barclays previously had a $4 price target on Fisker stock, you see -- and Fisker hasn't seen $4 prices on its shares since way back in November. Cutting Fisker shares to a $1 price target, Barclays was really just adjusting expectations to something a bit more reasonable, and more attainable, for this now penny stock to shoot for.
But even so, losing the dream that their stock might more than quadruple in the space of the next 12 months had to come as a bit of a letdown for Fisker investors.
Is Fisker stock a sell?
Barclays rates Fisker stock underweight (i.e., sell) today. Regardless, even with a new $1 price target, Barclays is predicting a big 18% upside for Fisker shares through the end of this year -- not an insignificant profit, if Barclays is correct. As the analyst argues in today's note, covered on TheFly.com, Fisker (and other EV stocks) have a chance to beat expectations in Q4 given the extremely pessimistic view many investors are taking of EV demand currently.
That said, Fisker has some high hurdles to clear if it intends to exceed expectations. According to Yahoo! Finance estimates, Fisker must cut its Q4 losses in half, to $0.27 per share, and grow its sales by [checks notes] ... more than 100,000%, from about $300,000 in Q4 2022 revenue to just under $320 million in Q4 2023.
With Fisker reporting that it delivered "approximately 4,700 Fisker Ocean" electric SUVs last year, mostly in Q4, and mostly at prices of $69,000 and up, Fisker has a good chance to hit that mark. Tune back in on Feb. 26, when Fisker files its report, to find out if the company made it.
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Rich Smith has no position in any of the stocks mentioned. The Motley Fool recommends Barclays Plc. The Motley Fool has a disclosure policy.
