Morgan Stanley analyst forecasts Lucid stock could move lower amid competition with Tesla

Yahoo Finance Live anchors break down an analyst call on Lucid stock.

Video transcript

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SEANA SMITH: Time for our triple play. Three stocks that we're watching in the final 30 minutes of trading. We have Lucid, Exxon, and Peloton. Starting it off with Lucid, it's the top-trending ticker on Yahoo Finance. Morgan Stanley's Adam Jonas making the case that Lucid stock is heading lower and that the fundamental outlook is quote, "more likely deteriorating than improving". One thing that has Jonas worried is Tesla's price cuts.

He's saying that's because he thinks it could lead to a drop in Lucid reservations. And that's not all demand for its higher priced cars. That could suffer given the current economic environment and the rising rate environment right now. Fed's expected to raise rates again tomorrow.

Now when it comes to Lucid's relationship with Saudi Arabia's public investment fund, Jonas noted that the relationship between the two could quote, "extend beyond a controlling shareholder status", and that guidance and support from Saudi Arabia will quote, "potentially enhance Lucid's long-term infrastructure and supply chain development."

Now Ines, he does have an underweight rating on the stock, thinking it could fall substantially further than it is today. And of course, this is contrary to kind of the rally that we saw in Lucid following that report about the fact that Saudi Arabia could potentially buy out the remaining stake in Lucid. So I think there's big question marks out on the street just in terms of what this company is going to look like over the next couple of quarters.

INES FERRE: Yeah, and how much they'll be able to produce going forward, but also that rally that you mentioned. I had reached out to an analyst that talked about the short interest on the stock that was over 20% short interest. So you were seeing a huge short squeeze with that headline. He said it's a really dangerous time to be in electric vehicle stocks right now.