By Michael Elkins
Raymond James reiterated a Market Perform rating on Fisker Inc. (NYSE:FSR), following the company's 3Q earnings release. FSR reported a top line miss with EPS of $(0.46) compared to the consensus estimate of $(0.43). The company's spending-related guidance is unchanged, poised to come in near the low end of the range.
"Alongside elevated operational risk as the company moves into production, a key source of uncertainty that is keeping us on the sidelines pertains to buyer preferences vis-a-vis the various Ocean versions," wrote the Raymond James analysts. "It seems clear that premium-priced versions will be prioritized for the first 12-18 months, but the longer-term margin profile remains a question mark, especially given that the Ocean will not be eligible for the U.S. federal tax credit."
Fisker announced during its 3Q meeting that the company expects 2023 production of 42,400 vehicles. However, the projections are even more back-end-weighted than Raymond James had originally thought, with only 300 in 1Q, building up to 15,000 in 3Q, en route to a full-year total of 42,400. Raymond James' forecast for deliveries remains 27,000.
Another issue facing the electric vehicle maker is the changes to the tax credits brought on by the Inflation Reduction Act. First and foremost, the bill requires vehicles to be manufactured in North America. The Ocean will be made in Austria. Eventually, starting in 2024, the plan is to produce the PEAR in the U.S., but for the next 18-plus months all of Fisker's revenue will come from the Ocean. Second, the bill eliminated the manufacturer cap that previously disqualified Tesla (NASDAQ:TSLA) and GM (NYSE:GM) vehicles. Finally, the bill included complex, technical stipulations. However, this is a moot point for the Ocean because it is already disqualified due to being made overseas.
Shares of FSR are down 8.44% in pre-market trading on Thursday.