CFRA initiates Polestar at Buy, sees clear path to profitability
CFRA initiates Polestar (PSNY) at Buy, sees clear path to profitability
PSNY
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CFRA Research initiated coverage on Polestar Automotive (NASDAQ:PSNY) with a Buy rating and set their 12-month price target for the electric vehicle stock at $6.00.
CFRA analysts see PSNY reaching an adjusted EPS growth from ($0.51) in 2022 to ($0.45) in 2023, ($0.10) in 2024, and $0.15 in 2025.
They wrote in a note, “Polestar has achieved greater success with its production ramp-up than many of its EV manufacturer peers and impressively posted a gross profit both in Q1 and for the full-year 2022.”
The automaker has successfully grown its EV sales from 10K units in 2020 to 29K units in 2021 and 51K units in 2022, and plans to increase volumes to 60K-70K units in 2023.
“We like PSNY’s low-cost manufacturing footprint in China and exposure to countries with much higher rates of EV adoption than the U.S.” the analysts added. Noting that customers located in Europe accounted for almost two-thirds of total revenue last year.
As volumes grow, CFRA expects additional gross margin expansion. They also see a clear path to profitability in the near future as higher-priced luxury/premium EV models, like the Polestar 3 and 4, hit the market in the coming months.
Shares of PSNY are down 3.82% in morning trading on Friday.
