Analyst Edison Yu of Deutsche Bank maintained a Sell rating on Joby Aviation (JOBY – Research Report), retaining the price target of $4.00.
Edison Yu has given his Sell rating due to a combination of factors involving Joby Aviation’s financial position and capital requirements. Joby’s recent private placement of $500 million from Toyota, which will be received in two tranches, is a positive in terms of providing Joby with an extended financial runway. Toyota’s full allocation and strategic involvement lessens the likelihood of selling pressure. However, the deal underscores the substantial capital that Joby needs for certification and commercialization processes. Despite this significant funding, Yu anticipates that Joby will still require an additional $300 million to $500 million in the near future, which raises concerns about the company’s financial sustainability.
Yu’s analysis also points to potential difficulties Joby faced in securing institutional funding, which might suggest a lack of confidence among broader investors. The decision to secure funding at this time, rather than later, indicates apprehension regarding the stock’s performance, which has not shown considerable strength despite a more favorable environment for growth assets. These factors, combined with a projected cash burn of over $450 million this year alone, contribute to Yu’s continuation of a Sell rating and a price target of $4, maintaining a cautious stance on Joby’s financial health and stock potential.
Yu covers the Consumer Cyclical sector, focusing on stocks such as Ford Motor, Tesla, and American Axle. According to TipRanks, Yu has an average return of -14.5% and a 27.78% success rate on recommended stocks.
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Joby Aviation (JOBY) Company Description:
Reinvent Technology Partners is a blank check company.
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