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Lordstown Motors Partners with Foxconn; Updates Financial Outlook

Lordstown Motors (RIDE) is teaming up with Hon Hai Technology Group (“Foxconn”) to work on electric vehicle programs at its assembly plant in Lordstown, Ohio. Following the agreement, the company has updated its financial plan and production outlook. RIDE shares fell 18.17% to close at $6.53 on October 1.

The Lordstown Motors team will build a limited number of vehicles for testing, validation, and verification as it seeks regulatory approval. Additionally, the company will evaluate the impact of its partnership with Foxconn on commercial production and supply chain opportunities. (See Lordstown Motors stock charts on TipRanks)

Following the inking of the strategic agreement with Foxconn, Lordstown Motors has updated its financial outlook. It now expects its capital expenditures to remain unchanged at between $375 and $400 million, while SG&A expenditures are expected to range between $105 and $120 million, up from previous guidance of between $95 and $105 million due to higher legal fees.

R&D Expenditures should range between $320 and $340 million, up from $310 to $320 million. The update is attributed to potential increases in pre-production costs. As of September 30, 2021, cash balances ranged between $210 and $240 million, down from $225 to $275 million.

The cash balance included about $20 million from the issuance of Lordstown Motors common stock. However, it excludes Foxconn’s repurchase of $50 million of its common stock.

Recently, Morgan Stanley analyst Adam Jonas reiterated a Hold rating on the stock with an $8 price target, implying 22.51% upside potential to current levels. According to the analyst, Lordstown Motors electric vehicle and unit of technical capacity could provide valuation support.

Consensus among analysts is a Moderate Sell based on 1 Buy, 3 Holds, and 3 Sells. The average analyst price target of $6 implies 8.12% upside potential to current levels.

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The post Lordstown Motors Partners with Foxconn; Updates Financial Outlook appeared first on TipRanks Financial Blog.

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