Fisker is ‘electric vehicle architect,’ Morgan Stanley says, boosting stock

Fisker Inc. stock jumped nearly 20% on Tuesday after a boost from Morgan Stanley, which said the electric-car maker is the rare EV startup likely to launch its vehicles on time and that the stock has room to more than double in a year’s time.

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Fisker FSR, +21.56% shares were on track to close at their highest in nearly six weeks and for their largest one-day percentage increase since late February.

Adam Jonas at Morgan Stanley resumed coverage of Fisker’s stock at the equivalent of a buy rating, setting a 12-month price target of $40, or 122% upside over Tuesday’s share price.

“We believe (Fisker) may be one of the only EV-related startups to actually launch on time and ramp efficaciously in late 2022,” Jonas said in his note. Its business model is to be an EV design-and-engineering lab and consumer-experience “architect,” he said.

“We continue to recommend FSR as our highest rated de-SPAC EV startup,” Jonas said.

Fisker has moved to contracting with auto parts, electronics and other makers in a bid to diversify its production, a strategy some on the Street have dubbed a bid to become the “Apple of autos,” focusing on design and consumer interfaces.

It announced a deal with electronics powerhouse Foxconn Technology Group in February. Fisker also has an agreement with auto parts maker Magna International Inc. MGA, +2.82%, planning to have four vehicles in production by 2025, three with Magna and one with Foxconn.

Fisker is “taking a different path with respect to outsourcing,” Jonas said in his note. Fisker’s critics say that the EV maker outsources “too much to suppliers” and doesn’t have as much of a “secret sauce ‘in-house,’” he said.

“While we agree that the big winners in the global EV arms race may be the vertically integrated platform players, there is room for other strategies,” Jonas said.

Fisker in August reported a narrower quarterly loss than Wall Street expected and said it remains on track to start producing its first vehicle, an all-electric SUV, by next year.

Fisker went public in October through a merger with a blank-check company.

The stock has gained 20% so far this year, with an advance of around 18% for the S&P 500 index. SPX, +0.10%

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