Cantor Fitzgerald Maintains Neutral on Lucid, $8 PT
Cantor Fitzgerald analyst Andres Sheppard reiterated a Neutral rating and $8 price target on Lucid Group (NASDAQ: LCID).
Our Thoughts: We remain Neutral, and our $8PT is Unchanged – Cantor’s Take.
LCID reported Q2 revenue of $405.3M, in-line with Visible Alpha consensus of $404.2M (and above ~$259M in 2Q25), driven by 3,953 vehicle deliveries (led primarily by Gravity), and reported Gross Margin and Bottom Line below consensus expectations (after 4,774 vehicles produced).
Additionally, recall that new management suspended guidance in Q1 (was previously guiding FY26 production of 25,000-27,000 vehicles, and FY26 Capex of $1.2B-$1.4B), and on the call the company did not issue a new production outlook for the year, though did disclose that it expects Q3 and Q4 production levels to be below Q2.
Management is now targeting to issue new FY26 guidance later in the year (we expect Q3), and to provide FY27 guidance (and Mid-term targets) during its year-end results.
For this year, we now model 15,048 vehicles produced (vs. prior 25,050), reflecting management’s comments.
More importantly, in Q2, LCID reaffirmed that its AMP-2 Manufacturing facility in Saudi Arabia remains on-track after it completed its construction phase and entered its “industrialization phase.” LCID is targeting initial production at AMP- 2 in “early 2027,” and we view this as the most material catalyst for this year, ahead of production of the company’s upcoming Midsize platform.
On the call, management affirmed that Midsize remains on-track and is targeting material production ramp-up in 2H27.
In our opinion, we expect Midsize to materially accelerate the company’s path towards profitability, driven by the more competitive price point and by the better margin profile.
Separately, recall that LCID has an agreement with the government of Saudi Arabia for up to 50,000 vehicles (plus an option for an additional 50,000), and we expect Midsize to represent most of these deliveries, (though for next year we currently model <3,500 Midsize deliveries since we want to remain conservative).
Regarding robotaxis, we remain encouraged by the company’s plan to enter the market via its partnership with Uber, which management on the call described as a “top priority,” and reaffirmed that SOP remains on track for 4Q26.
LCID previously expanded its Uber robotaxi partnership to >35,000 vehicles (from prior ~20,000), and the partnership is over six years, starting in 4Q26.
On the Call, LCID’s new management disclosed the company’s new priorities will center around improving Cash and Costs, Customer and quality, and Culture.
Furthermore, management highlighted a ~$1.4B cash flow improvement in 2026 (expects to achieve between now and year-end) across operating expenses, capital expenditures, and working capital, which is encouraging in our view.
Lastly, LCID now has total liquidity of ~$3B as of Q2, which management expects is sufficient to fund the business “well into next year” (we model a capital raise in 3Q27).
Overall, we are encouraged by the new management’s roadmap towards accelerating LCID’s path to profitability and by the progress at AMP-2 (and subsequent manufacturing of Midsize platform), which we view as the most material catalyst.
Still, we remain Neutral Rating, and our $8PT is Unchanged.
No New Guidance, and Q3/Q4 Production Expected Below Q2.
LCID was previously guiding FY26 vehicle production of 25,000-27,000, and FY26 Capex guidance of $1.2B-$1.4B, though the company pulled guidance in Q1 after the new management.
While the company did not issue new production guidance for the year, management did disclose that it expects production in Q3 and Q4 to be below Q2 levels, with Q3 and Q4 deliveries expected to be above production levels.
Additionally, the company expects to issue new guidance once its business review is complete (we expect 3Q26), and expects to provide FY27 guidance and Mid-term plans and targets during its year-end results.
AMP-2 Production Plant “Moving towards Industrialization Phase.” In Q2, LCID announced that its AMP-2 plant in Saudi Arabia has completed the construction phase and is now in the industrialization stage, with manufacturing capabilities now being installed.
On the call, management disclosed that it is targeting production at AMP-2 to begin in early 2027, with midsize production to ramp up in 2H27.
We view this as a material catalyst and recall that the AMP-2 facility is expected to have an annual production capacity of ~155K vehicles once complete.
Midsize Platform – Targeting Material Ramp-up in 2H27. Lucid’s Midsize platform consists of three different models: Cosmos, Earth, and a third yet to be disclosed.
The company is targeting to offer its midsize vehicle for a starting price <$50,000, which we find encouraging.
Additionally (and perhaps an underappreciated aspect of Midsize’s preview, yet material, in our view), LCID is targeting its Midsize platform to result in up to 70% lower unit cost, and we expect LCID’s Midsize to have approximately between 2/3 – 1/2 fewer components than its Gravity SUV vehicles.
Furthermore, management has also previously disclosed that Cosmo and Earth will share ~95% of their components, which we view as encouraging.
By 2028, LCID is targeting Midsize to comprise ~75% of total deliveries.
In Q2, the company disclosed that the development of the midsize program is continuing well, with LCID currently conducting cold-weather testing in New Zealand.
Overall, we continue to view Midsize as the most material catalyst for the company.
In our estimates, we model initial Midsize deliveries in 3Q27, and we conservatively model 2,912 midsize deliveries in FY27.
Robotaxi On-Track & a “Top Priority.” Lucid and Uber (UBER, OW) previously expanded their robotaxi partnership to >35,000 vehicles (starting with Gravity), vs. prior ~20,000, and the companies are targeting commercial robotaxi launch in late 2026 in the San Francisco Bay Area.
LCID is planning to add at least 25,000 “Midsize Plus” vehicles for Uber’s planned global autonomous service, targeting SOP in 2H28E.
LCID previously revealed the initial design for its new two-seat robotaxi concept called “lunar,” which features no steering wheel or pedals, and for which management is targeting 40% lower operating cost.
In Q2, management highlighted the robotaxi program as a “top priority,” and the company announced that the program is in active testing and validation.
Saudi Prince Discloses 5% Passive Stake in Lucid.
In a filing on 7/23, LCID disclosed that Saudi Prince Alwaleed has taken a ~5% ownership stake, which sent shares up ~22% on the day (vs.
S&P 500 roughly flat). More importantly, this reaffirms the PIF’s commitment to the company, in our view, which we view as material.
PIF is LCID’s largest holder with a ~45% stake (according to Bloomberg), and recall that LCID has an agreement with the government of Saudi Arabia to deliver 50,000 vehicles (plus an option for an additional 50,000).
Management Outlines New Restructuring Plan. New management disclosed that the company’s priorities will now center around improving Cash and Costs, Customer and quality, and Culture.
Additionally, management highlighted a ~$1.4B cash flow improvement opportunities that it expects to achieve in 2026 (over the next two quarters) across operating expenses, capital expenditures, and working capital, which is encouraging in our view.
Additionally, LCID is removing its 2nd shift at its AMP-1 facility, and transitioning to 1 shift.
Key Financials: Top Line: LCID reported 2Q26 revenue of $405.3M, in-line with Visible Alpha consensus of $404.2M (and above ~$259M in 2Q25), driven by 3,953 vehicle deliveries in the quarter (and 4,774 vehicles produced).
Additionally, LCID reported a 2Q26 adj. EBITDA loss of ~($901M) vs. our estimate/Visible Alpha consensus of ~($703M)/~($691M) (and vs. ~($632M) in 2Q25).
Gross Margin: LCID reported a 2Q26 GAAP gross margin of ~(105%), below our estimate/consensus of ~(75%)/~(60%) (and vs. ~(105%) in 2Q25).
Bottom Line: LCID reported a 2Q26 Net loss of ($1,034.9M), below consensus of ($889.2M) (and vs. ($539.4M) in 2Q25).
Additionally, LCID reported a 2Q26 Non-GAAP diluted net loss per share of ($2.78), below consensus ($2.25) (and vs. ($2.35) in 2Q25).
LCID also reported 2Q26 capex of ~$254M, vs. consensus ~$311M, and 2Q26 FCF of ~($1,476M) vs. our estimate/consensus of ~($981M)/~($854M).
Liquidity Update: “Funded Well into 2027.” LCID reported ~$0.8B in cash, cash equivalents, and investments as of 2Q26 (vs. ~$0.7B as of 1Q26).
As of Q2, LCID has total liquidity of ~$3.0B (vs. ~$3.2B in 1Q26), which includes a ~$2.0B unsecured delayed draw term loan facility (DDTL), a ~$270M Asset-Backed Revolving Credit facility (subject to borrowing base availability), and a ~$2M Gulf International Bank (GIB) facility.
More importantly, LCID reiterated that it believes the current liquidity is sufficient to fund the company “well into next year.”
Upcoming Potential Catalysts.
Launch of robotaxi via Uber/Nuro (4Q26E), hands-free highway and city driving autonomy (2H26E), the completion of AMP-2 facility in Saudi Arabia (we expect 1Q27E), Midsize ramp (we expect 2H27E), and launch of DreamDrive Pro autonomy subscription (1H27E).
Valuation. Our Neutral rating and our $8 PT Are Unchanged.
In our model, we are lowering our FY26 vehicle production/delivery estimates to 15,048/15,499 vehicles, respectively (from prior 25,050/22,295, respectively), resulting in a decrease to our FY26 revenue estimate to $1,530.8M (from prior $1,956.4M).
We are also decreasing our FY26 Opex/Capex to $2,557M/$954M, respectively (from prior $2,583.4M/$1,304.0M, respectively), as we incorporate management’s cost-reduction initiative into our model.
Lastly, we lower our FY27 production/delivery estimates to 33,000/31,350, respectively (from prior 56,000/53,200, respectively), as we want to remain conservative, resulting in a decrease in our FY27 revenue estimate to $2,466.1M (from prior $4,073.3M).
We arrive at our $8 PT via a bottom-up 10-year DCF. We assume an 11% WACC and a terminal value with a 2% long-term growth rate.
Key risks include: High negative gross margins, additional capital needs, tariffs, continued supply-chain disruptions, manufacturing constraints, a highly competitive market, and slower-than-expected customer adoption.
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