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Investing.com - Morgan Stanley (NYSE:MS) has reiterated its Equalweight rating and $3.00 price target on Lucid Group Inc . (NASDAQ:LCID) following the announcement of a three-way partnership with Nuro and Uber (NASDAQ: NYSE:UBER), which currently trades near its InvestingPro Fair Value with a market capitalization of $189.77 billion.
The partnership will deploy at least 20,000 Lucid Gravity SUVs equipped with Nuro’s L4 autonomous technology on the Uber network over the next six years. Prototypes are currently undergoing testing at Nuro’s Las Vegas proving grounds, with an official launch expected in "a major US city" later next year.
As part of the agreement, Uber plans to make a $300 million investment in Lucid and an additional investment in Nuro. Morgan Stanley notes this funding provides Lucid with a "modest financial cushion" as it ramps up production of its Gravity SUV.
The investment bank highlighted that Lucid’s largest shareholder, which holds a 64% stake in the company, also maintains a significant stake in Uber (approximately 4%), potentially creating alignment between the companies. Morgan Stanley’s March upgrade of Lucid was driven by what it believed was the market underappreciating the company’s strategic opportunities.
Morgan Stanley sees potential for additional autonomy-related partnerships and other strategic opportunities for Lucid, including licensing EV technology to legacy automakers, leveraging unused EV capacity, and potentially serving as an "on-ramp" for Chinese electric vehicles in the US market.
In other recent news, TD Cowen has maintained its Buy rating on Uber, setting a price target of $104, driven by expectations for continued growth and margin expansion. The firm forecasts Uber’s second-quarter gross bookings to reach $46 billion, reflecting a 15% year-over-year increase, and anticipates a 32.7% growth in EBITDA, surpassing the midpoint of management’s guidance. Uber is also expanding its SNAP EBT payment program, adding Wegmans, Gopuff, and Family Dollar to its list of participating merchants, enhancing food accessibility for eligible customers. Meanwhile, Citizens JMP has reiterated a Market Perform rating for Uber, highlighting the company’s strong execution of its autonomous vehicle partnership strategy and its ability to integrate both autonomous vehicles and human drivers.
Waymo, a subsidiary of Alphabet (NASDAQ:GOOGL), has expanded its self-driving service in Austin, Texas, to cover 90 square miles, enhancing its competitive stance against Tesla (NASDAQ:TSLA) in the region. The company recently achieved a milestone of 100 million miles driven autonomously, doubling its autonomous mileage in about six months. On the other hand, BofA Securities has maintained an Underperform rating on Lucid Group, keeping the price target at $1.00 amid concerns over CEO departure and potential challenges related to product development and tariff costs. Despite the positive announcement of selling over 20,000 vehicles and an Uber investment, BofA remains cautious about the financial implications for Lucid.
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