Key Takeaways:
Lucid Group (NASDAQ: LCID) had its price target cut in half to $5 by Morgan Stanley, which cited a series of operational and leadership challenges that obscure the electric vehicle maker’s path to profitability. The firm maintained its Underweight rating on the stock.
“A supplier quality issue resolved during the quarter had an impact, but January and March deliveries were ahead of the same periods in the prior year,” Interim CEO Marc Winterhoff said in the company’s Q1 2026 earnings report, attempting to reassure investors.
The 50% price target reduction follows a difficult quarter for Lucid. A supplier quality issue forced a 29-day stop-sale on its new Gravity SUV, suppressing deliveries. Compounding the issue, the company suspended its full-year guidance and is currently searching for a permanent CEO, creating what Morgan Stanley sees as a "deepening visibility vacuum" for investors. For its first quarter, Lucid reported revenue of $282.5 million, missing analyst expectations of $358.51 million, while its loss per share of $2.82 was wider than the anticipated $2.30 loss.
Shares of Lucid fell over 2% in after-hours trading following the earnings report on May 5. The stock has declined 74% over the past 12 months, reflecting growing investor concern over the company's mounting losses, which climbed to $3.7 billion in 2025 from $3 billion in 2024. While the company is expanding partnerships, including a deal to supply up to 35,000 vehicles to Uber's robotaxi service, it faces an uphill battle.
The sharp downgrade puts the stock at its lowest levels in years, testing investor confidence as the company navigates production hurdles and a leadership transition. Investors will be closely watching for a strategic update from the incoming CEO and any progress on the company’s goal to accelerate toward financial self-sufficiency.
This article is for informational purposes only and does not constitute investment advice.
