Stock Market

Fisker Living Up to the Hype After SUV Debut at L.A. Auto Show

Shares in electric vehicle startup Fisker (NYSE:FSR) had been on the rise since the end of October. After FSR stock spent much of the summer and fall in a slump, that was welcome news for investors. One of the driving factors behind the optimism was the approaching Los Angeles Auto Show, where the company was scheduled to officially debut a production-intent version of its battery-powered Ocean SUV. The debut came, and FSR promptly dropped nearly 10%. The following days, shares slid another 6%.

The Fisker logo hangs on display at the November 2011 International Auto Show.

Source: Eric Broder Van Dyke / Shutterstock.com

Did the Fisker Ocean fail to live up to expectations, or was this simply a case of excitement dying down after the big reveal? After all, the company is still a year from production.

If it’s the former, then there are other EV stocks that would be a safer bet. However, if we’re simply dealing with a case of a temporary cooling in enthusiasm now that the big reveal is over and the reality of a year-long wait sets in, then opportunity may just be knocking. 

L.A. Auto Show 

Fisker has shown off its Ocean EV in the past, but there’s been a healthy dose of skepticism around it. That’s always the case when you’re looking at a prototype. Specs and design elements can change. Pricing is a ballpark at best, and Fisker was promising a battery-powered SUV for under $40K with an affordable $379 monthly payment option.  

In terms of living up to sky-high expectations, Fisker delivered at the L.A. Auto Show, taking the wraps off the production-intent Ocean EV. 

There are three different variations and one, the Ocean Sport, has a $37,499 starting price, without counting any tax credits. That version is four-wheel drive, has a 6.9 second 0-60 mph time, and 250 miles of range. At the other end of the spectrum, Ocean Extreme (starting price of $68,999) is all-wheel drive with a 3.6-second 0-60 mph time, and 350-plus miles of range. The Ocean Extreme’s unique SolarSky roof trickle charges the battery, adding up to 2,000 miles per year in additional driving range.

The company also confirmed EV fans can pick up an Ocean for $379 per month. This is a flexible lease plan that can be ended at any time. It has 30,000 miles of annual driving and requires a $2,999 initiation and activation fee.

As for when you can actually buy an Ocean, Fisker says it remains on track to begin production  in Austria next November.  

Add an Analyst Upgrade 

Part of the FSR stock rally this month was an analyst upgrade a week before the L.A. Auto Show. Bank of America analyst John Murphy raised his price target for FSR from $18 to $24, adding to the momentum.

According to TipRanks, the majority of analysts agree. The stock has a buy rating and a $24 average price target after seven ratings, which would be over 10% upside from the stock’s current price.

Bottom Line on FSR Stock

Back in June, I wrote that FSR stock had significant long-term growth potential thanks to high demand for EVs. However, it also had risk, primarily around the fact that it had yet to actually produce a vehicle. In addition, the company had a pattern of announcements falling through, which was causing some skepticism. 

Fisker’s performance at the L.A. Auto Show this week went a long way toward alleviating those concerns. The Ocean is still a year from production, but revealing the finalized version(s) of the Ocean is a big step. In addition, Fisker confirmed it would be offering an Ocean for under $40,000 and a $379 per month payment — a claim that helped to generate excitement about the company, but had been widely doubted to actually materialize.

At the time I published that post, FSR stock closed at $19.28 and earned a “B” rating in Portfolio Grader. Four and a half months later, that situation hasn’t changed much. Fisker shares are up slightly and the stock still rates a “B.” However, the likelihood that the Fisker Ocean will reach its production goal — and be an in-demand EV — seems more realistic than ever.

On the date of publication, neither Louis Navellier nor the InvestorPlace Research Staff member primarily responsible for this article held (either directly or indirectly) any positions in the securities mentioned in this article.

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