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Tesla Inc. (TSLA), the giant of the electric vehicle (EV) industry, has hit a major rough patch in 2024, with its stock taking a 27.9% dive since the start of the year. As TSLA battles with Boeing (BA) for the title of worst S&P 500 Index ($SPX) stock of 2024, analysts have been downgrading Tesla and lowering their price targets - resulting in a consensus rating of “Hold” for TSLA, down from “Moderate Buy” just two months ago.
As the Biden administration tweaks its plans for auto emissions standards, it seems that analysts have found some EV stocks they like better than TSLA. While some embattled electric automakers are still falling by the wayside in this tough macro environment, those that do survive should benefit from a continued push toward sustainable transport options.
For investors looking to speculate on the future winners of the current EV industry shake-up, here are three stocks with consensus “Strong Buy” ratings from Wall Street experts.
EV Stock #1: Beam Global (BEEM)
Beam Global (BEEM) is at the forefront of sustainable energy, crafting innovative systems like their patented EV ARC chargers.
The stock has lagged the broader equities market significantly over the past 52 weeks, and is down 4.7% since the start of the year. However, BEEM is up about 35% from its 52-week low.
BEEM recently bagged a $1 million deal with the UK Ministry of Defence for 10 of their EV ARC systems and an ARC Mobility trailer, set for deployment in Cyprus. This move not only highlights the global appetite for BEEM's tech, but also underscores their growing footprint in the sustainable energy sector.
Separately, BEEM secured a new patent on March 19 for a "Self-Contained Renewable Inductive Battery Charger," enhancing their reputation as innovators in EV charging technology.
Beam Global is set to report earnings on April 3, and analysts are predicting a loss per share of $0.25 for Q4 of 2023 - significantly narrower than the year-ago loss of $0.77 per share. For the full year, Wall Street anticipates a per-share loss of $0.21, compared to the expected $1.19 deficit in fiscal 2023.
The analyst outlook for BEEM is positive, with a “strong buy” consensus. With five analysts weighing in, four are giving it a “strong buy,” and one suggests “hold.” The mean target price is $24.25, suggesting a whopping 258% upside potential.
EV Stock #2: Li Auto (LI)
Li Auto Inc. (LI) is making waves in the bustling EV market, crafting premium smart electric SUVs that are all the rage in China - and catching eyes worldwide, too.
LI has been a relative outperformer in the past 52 weeks, up 31.5% over this period.
Financially, Li Auto is on a roll. Their Q4 2023 earnings were a pleasant surprise, with EPS of $0.60 surpassing what the experts predicted. Quarterly revenue hit a cool $5.88 billion, and analysts are targeting full-year EPS of $2.06 for 2024, with revenue forecasts touching $27.78 billion. And for 2025? Analysts are expecting even bigger things, with the consensus EPS estimate at $3.17.
On the innovation side of things, Li Auto is pushing the envelope with their new hybrid SUV model, the Li ONE Hybrid, unveiled with a bit of fanfare at the Shanghai Auto Show. Set to hit the roads in the third quarter of 2024, this new model is a clear signal that Li Auto is upping its game in the competitive EV arena.
Analysts are pretty jazzed about Li Auto's future, with an overwhelming consensus leaning towards a "strong buy." Out of 9 analysts, 8 are all in, while one bull is playing it a bit more cautiously with a "moderate buy." They've pegged the mean target price at $52.73, hinting at a juicy 71.8% potential upside from its current standing.
EV Stock #3: Canoo (GOEV)
Canoo Inc. (GOEV) is a mobility technology company that specializes in designing and developing EVs. Their approach to the automotive industry is centered around reinventing the landscape with bold innovations in vehicle design, pioneering technologies, and a unique business model.
But despite their forward-thinking approach, GOEV's stock has seen better days. The shares are down more than 51% from their early January highs - even as GOEV has rallied 182% from its March 14 all-time low. The price action in Canoo this year clearly highlights the volatility in the EV industry, and more so for penny stocks.
And that low share price is despite Canoo executing a 1-for-23 reverse stock split effective March 8, to boost their share price and stay in line with Nasdaq's rules. The reverse split is a classic maneuver to keep stocks out of penny territory, though - just like a standard stock split - it's a purely cosmetic move.
On the operational side, Canoo hit a major win when their Oklahoma City plant got the green light as a Foreign Trade Zone on March 18. This big thumbs-up from the Department of Commerce is expected to slash vehicle costs by a cool $70 million and help with duty deferrals over the next couple of years, giving Canoo a much-needed financial leg up.
Financially speaking, Canoo is set to report earnings on April 1, with Wall Street looking for a loss of $1.78 per share.
Analysts have a “strong buy” consensus on GOEV. Out of five pros dishing out advice, four are saying "strong buy," and one's playing it safe with a "hold." They've set a mean target price for GOEV at $41.40, which would be a massive 1,100% jump from the current price.
The Bottom Line on EV Stocks
To sum it up, Tesla may be hitting some speed bumps, but analysts still like the prospects for some smaller, up-and-coming EV players. Beam's innovative charging tech, Li Auto's resilient growth, and Canoo's enhanced efficiency could give these companies an edge going forward, offering investors potential growth opportunities in the out-of-favor electric vehicle space.
On the date of publication, Ebube Jones did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
