Lucid Group (LCID 1.53%) has experienced continued stock declines in 2025, following a nearly 30% drop in 2024. However, a Wall Street analyst has suggested that the electric vehicle (EV) manufacturer’s shares may now be undervalued.
Benchmark EV sector analyst Mickey Legg recently initiated coverage of Lucid with a “buy” rating and set a price target of $5. This target indicates that the stock could potentially rise by approximately 80% from its recent levels, even in the wake of a positive response to Legg’s report.
Focusing on the luxury segment of the EV market, Lucid has expanded its lineup to include the luxury Gravity SUV alongside various trims of the Air sedan. The company’s progress in this niche market has faced challenges due to a slowdown in EV sales growth. Nevertheless, Legg believes that 2024 marks the low point, with an acceleration in EV demand anticipated in 2025 and beyond. In his report, Legg stated:
“We view Lucid as well positioned to achieve significant share of this burgeoning opportunity based on its advanced technology, well-stocked balance sheet and access to capital, award-winning vehicles, Saudi investment, partnerships, and highly integrated manufacturing capabilities.”
Support from Saudi Arabia has played a vital role for Lucid. The Saudi Public Investment Fund (PIF), Lucid’s largest shareholder, has provided multiple rounds of capital for the company and has placed an order for 100,000 of Lucid’s electric sedans.
In 2024, Lucid delivered approximately 10,000 EVs and is relying on the new Gravity SUV to attract more consumers. The company is set to release its full fourth-quarter update on February 25. If investors receive news that early interest in the Gravity will significantly boost delivery volumes in 2025, Legg’s price target may be within reach. However, it may be prudent for investors to wait for statements from Lucid’s management before making investment decisions.
Howard Smith holds positions in Lucid Group. The Motley Fool does not have any position in the stocks mentioned, and follows a disclosure policy.
