Luminar’s stock could gain 40% as it racks up partnerships for its autonomous vehicle lidar technology, BofA says

• Bank of America initiated coverage of Luminar Technologies with a “neutral” rating and $23 price target.
• That’s a roughly 40% gain from current levels, though BofA noted Luminar’s distant production start-date is a risk to the stock.
• Luminar Technologies uses laser sensors, called lidar, that enable autonomous driving.
• Sign up here for our daily newsletter, 10 Things Before the Opening Bell.

Luminar Technologies appears to be a leader in next-generation commercial lidar technology as evidenced by its automotive partnerships, according to Bank of America.

On Tuesday a team of analysts led by Aileen Smith initiated coverage of the autonomous vehicle technology company with a “neutral” rating and $23 price target, a roughly 40% gain from current levels. Luminar Technologies uses laser sensors, called lidar, that enable autonomous driving.

Luminar’s stock price soared 110% to over $47 in the first three days following its public debut back in December, but has fallen significantly since then. However, BofA sees upside for Luminar in the next 12 months, especially because of the company’s promising partnerships with major auto companies.

Luminar currently has series production contracts on passenger vehicles with Volvo and SAIC, a strategic agreement on trucking/logistics with Daimler Truck/Torc, and a sales agreement for LIDAR into robo-taxi AV solutions with Mobileye, the analysts noted.

BofA said Luminar’s commercial partnerships could give it a competitive advantage in the rapidly-growing lidar market, but added that the future successes for Luminar are somewhat unclear, as the company doesn’t plan to start production until the end of next year.

“…with start of production not slated to commence until end of 2022, proof points of commercialization for LAZR’s technology beyond cited production contract wins and its forward looking order book are relatively limited,” the analysts said.

The analysts added that an important driver of Luminar’s stock will be bookings of production contracts and order book estimates. The lidar company has said it plans to score at least three additional commercial program wins and grow its forward order book by 40%+ in 2021, according to BofA.