Fisker Inc. Downgraded by TD Cowen Amid Growing Challenges
TD Cowen has downgraded Fisker Inc. to a Market Perform rating and reduced its 12-month price target on the stock, citing mounting challenges faced by the company. Initially, TD Cowen had a positive outlook for Fisker, recognizing the potential in its contract manufacturing relationships, attractive vehicle price point, and asset-light production approach. However, the increasing number and frequency of challenges have caused analysts to reassess their evaluation.
NHTSA Probes Fisker’s Ocean SUV Braking Issues
The National Highway Traffic Safety Administration (NHTSA) has launched an investigation into braking problems with Fisker’s Ocean SUV. The probe comes as a result of nine complaints, including one crash, which have raised concerns about the vehicle’s braking system. Regulatory probes are not uncommon, but for a new manufacturer like Fisker, they could result in significant delays and impact the company’s finances and investor confidence.
Fisker Adopts New Sales Strategy Amidst Ongoing Troubles
Fisker recently announced a change in its sales strategy for North America and Europe. In North America, the company is transitioning to a dealer partnership model, while in Europe, it will use a hybrid approach with both direct sales and dealers. However, the transition is not without risks, as the company highlighted in its 8-K filing, including potential cancellations and delays due to licensing and permit acquisition. State regulations could also restrict direct-to-consumer sales during this transition, further adding pressure to delivery timelines.
Potential Delays and Financial Impact for Fisker as Probe Continues
The NHTSA investigation into Fisker’s Ocean SUV braking issues could lead to significant delays and financial impacts for the company. As a new manufacturer in the EV market, Fisker relies heavily on a smooth production and delivery process to maintain investor confidence. Any disruption caused by the probe could result in financial strain and further challenges for the company.
Fisker’s Stock Takes a Hit as Delivery Delays and Investigations Weigh On Investor Confidence
As a result of the ongoing challenges faced by Fisker, including delivery delays and the NHTSA probe, the company’s stock has taken a hit. Shares of Fisker Inc. are down 10.3% in mid-day trading, reflecting the diminishing appeal of the company in the eyes of investors. The inconsistent delivery cadence, shift in distribution strategy, and now the investigation into the braking performance of the Ocean SUV have led TD Cowen to downgrade Fisker and express caution regarding recommending the stock. The company’s ability to navigate these challenges and regain investor confidence will be crucial in determining its future success in the EV market.
Analyst comment
Negative News: Fisker Inc. Downgraded by TD Cowen Amid Growing Challenges
As an analyst, it is expected that the market for Fisker Inc. will likely experience a decline due to the downgrade by TD Cowen and the mounting challenges faced by the company. The reduced price target and reassessment by analysts indicate a loss of confidence in Fisker’s potential. These challenges, including the NHTSA probe into the Ocean SUV and the adoption of a new sales strategy, could result in significant delays, financial strain, and a negative impact on investor confidence. Fisker’s ability to overcome these challenges will be critical for its future success in the EV market.
