BofA analyst John Murphy said Lucid could become the next Tesla or Ferrari based on estimates.
Murphy called Lucid "one of the most legitimate start-up EV automakers" in its report.
Lucid Group went public earlier in July via a SPAC and unveiled its first car earlier this month.
Lucid was dubbed the next Tesla or Ferrari in a recent analyst note from Bank of America.
Bank of America analyst John Murphy said Lucid could pose a threat to other startups like Tesla and Rivian, as well as more established automaker's EV brands like Ford and GM. When he initiated coverage of the electric carmaker's stock on Wednesday, he called Lucid "one of the most legitimate start-up EV automakers."
In the note to investors, the Bank of America analyst said that Lucid has many of the ingredients necessary for success, including "innovative technology, attractive product, compelling brand, clean sheet manufacturing approach, and impressive management."
In particular, Murphy highlights the Lucid Air sedan, which was officially unveiled earlier this month with a starting price of $77,400. On Wednesday, Autoweek reported that the range for the premium edition of the sedan, the Lucid Air Dream, surpasses the company's own estimates, hitting 520 miles on a full charge.
Preorders for the Lucid Air Dream are already sold out. That model costs $169,000 compared to Tesla's high end Model S, which starts at $130,000. Its price puts it just below the $200,000 to $400,000 price range for a new Ferrari.
The reports come a day after Morgan Stanley's Adam Jonas said in a note to investors that Lucid is a "super premium" electric-car company, but ultimately competition in the EV market may be too great for the startup.
At the time, Jonas said Lucid and Israel-based Ree Automotive "face higher execution risk that impacts the risk/reward for investors."
But Murphy joins the majority of analysts from CFRA and Citi who are bullish on Lucid stock. While Jonas posted a $12 price target, Murphy puts Lucid's target at $30. The analyst said he has a bullish view of Lucid based on an EV/sales ratio of around 3.0x and an EV/EBITDA multiple of around 37x for 2025 estimates.
He notes that the multiples are higher than Tesla's when it first started out, though they pale in comparison to current Tesla numbers.
Lucid Group went public earlier this year on the Nasdaq via a special acquisition merger with Churchill Capital IV Corp and received a $24 billion valuation.
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