Lucid Group (LCID) Stock: Why Shares Exploded 18% on Wednesday

TLDR

• Lucid Group shares soared 17.9% Wednesday, closing at $11.47 with trading volume up 167%
• Partnership with Rockwell Automation announced for Saudi Arabia manufacturing facility software systems
• King Abdullah Economic City plant will be Saudi Arabia’s first vehicle manufacturing site
• Wall Street analysts maintain “Reduce” rating despite rally, with price targets ranging from $10 to $21
• Q3 results showed $2.65 loss per share on revenue of $336.6M, up 68% year-over-year

Lucid Group stock rocketed higher Wednesday after unveiling a strategic manufacturing partnership. Shares closed at $11.47, marking a 17.9% gain from Tuesday’s close of $9.73.

Lucid Group, Inc., LCID

The stock hit an intraday high of $11.65 during the session. Trading volume exploded to 23.16 million shares, representing a 167% jump over the normal daily average.

The catalyst? Lucid announced Rockwell Automation would power its Saudi Arabian manufacturing operations with enterprise software solutions.

The EV maker will implement Rockwell’s FactoryTalk manufacturing execution system across all major production areas. The King Abdullah Economic City facility marks Saudi Arabia’s first vehicle manufacturing plant.

Lucid plans to produce its future midsize vehicles at the location. This represents a major expansion beyond the company’s existing Arizona factory.

Real-Time Manufacturing Control

Rockwell’s software will deliver real-time visibility and traceability across production operations. The system aims to enhance manufacturing efficiency while maintaining quality standards.

The automation company will also provide training programs for local Saudi workers. This aligns with Saudi Arabia’s Vision 2030 economic diversification initiative.

Wall Street Remains Skeptical

The stock’s performance contrasts sharply with analyst sentiment. The consensus rating sits at “Reduce” with an average price target of $18.92.

Morgan Stanley delivered a harsh downgrade in December, cutting its rating from “buy” to “underweight.” The firm dropped its price target from $30 to $10.

Royal Bank of Canada trimmed its target from $20 to $14 in mid-January. Stifel Nicolaus lowered projections from $21 to $17 in November.

Current ratings break down to two buys, five holds, and four sells.

The company’s market capitalization stands at $3.72 billion. Technical indicators show the 50-day moving average at $12.11 and the 200-day moving average at $18.38.

Lucid’s balance sheet shows a quick ratio of 1.34 and current ratio of 1.81. The debt-to-equity ratio sits at 1.19.

Financial Performance

Third-quarter results revealed a $2.65 per share loss. This missed analyst expectations of $2.32 by $0.33.

Revenue totaled $336.58 million, falling short of the $378.44 million estimate. Still, revenue jumped 68.3% compared to last year’s corresponding quarter.

The company posted a negative net margin of 224.99%. Return on equity came in at negative 85.13%.

Analysts project a $1.25 loss per share for the full year.

Institutional investors control 75.17% of outstanding shares. Goldman Sachs doubled its position in the first quarter, now holding 5.44 million shares worth $13.17 million.

AQR Capital Management increased its stake by 89.9% to 537,801 shares. Royal Bank of Canada boosted holdings by 9.5% to 110,716 shares valued at $267,000.

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