Polestar price target raised to 40c from 33c at Bernstein
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Jan 18 2025
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Should l Buy PSNY?
Price Target Adjustment: Bernstein analyst Daniel Roeska increased Polestar's price target from 33c to 40c while maintaining an Underperform rating due to concerns about the company's financial performance.
Strategic Shift: Polestar's new leadership outlined a strategy focusing on premium electric vehicles, improved production methods, and cash conservation, although Bernstein predicts that profitability will take longer than expected.
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Analyst Views on PSNY
About PSNY
POLESTAR AUTOMOTIVE HOLDING UK PLC (Polestar) is a Swedish-based electric vehicle manufacturer. Company's portfolio includes Polestar 1, Polestar 2, Polestar 3, Polestar 4 and Polestar 5. Polestar products are currently available on markets across Europe, North America, China and Asia Pacific. Polestar cars are currently manufactured in two facilities in China. Polestar produces electric cars to reduce gas emmisions and develop new technologies to further minimize the carbon footprint.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
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- Exit Mechanism Design: Investors entered put option agreements with a wholly owned subsidiary of Geely Sweden Holdings, allowing banks to sell their stakes back after three years under predefined return conditions, providing a structured exit if market conditions change.
- Significant Sales Growth: In 2025, Polestar's retail sales surged 34% year-on-year to 60,119 cars, demonstrating strong demand and growth potential in the electric vehicle market.
- Positive Market Reaction: Following the financing announcement, Polestar's stock traded over 2% higher in Monday's premarket, although retail sentiment on Stocktwits remained in 'bearish' territory, indicating cautious market outlook.
See More
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- Funding Agreement Secured: Polestar has secured over $400 million in funding through the special purpose vehicle Feathertop Funding Ltd., with Sumitomo Mitsui Banking Corp. and Standard Chartered Bank each investing $200 million, reflecting confidence in its financial health.
- Transparent Equity Structure: Under the agreement, both banks will purchase Class A American Depositary Shares at $19.34 per share, with the option to sell their stakes within three years, ensuring neither institution will own more than 10% of Polestar's outstanding equity.
- Liquidity Enhancement: The CEO of Polestar stated that this financing will further enhance the company's liquidity position and strengthen its balance sheet, indicating positive progress in financial management.
- Market Expansion Plans: Concurrently, Geely is considering entering the U.S. market within the next 2-3 years, showcasing its ambition for global expansion, which could present new growth opportunities for Polestar.
See More
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- Exit Mechanism: The financing arrangement includes a put option agreement with a wholly owned subsidiary of Geely Sweden Holdings, providing the financial institutions with an exit path within three years, ensuring investors can secure certain returns if necessary, enhancing investment flexibility.
- Similarity in Terms: The terms of this financing are similar to the equity financing arrangements announced by the company in December 2025, indicating Polestar's consistency and stability in the capital markets, which may attract more investor interest.
- Market Performance: Polestar reported record retail sales in 2025 and secured a new term loan facility of $600 million, further solidifying its competitive position in the electric vehicle market.
See More
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- Investment Overview: Polestar announced a $400 million equity investment from Feathertop Funding Limited, with Sumitomo Mitsui Banking Corporation and Standard Chartered Bank each contributing $200 million, reflecting strong investor confidence in the company's growth prospects.
- Exit Mechanism: The financial institutions have entered into a put option arrangement with a wholly-owned subsidiary of Geely Sweden Holdings, providing an exit path within three years, which enhances the attractiveness of the investment by ensuring potential returns.
- Price Stability: The purchase price for each Class A ADS is set at $19.34, the same as in the December 2025 financing, and the lack of restrictions on the sale of ADSs will help maintain market liquidity and investor interest.
- Future Outlook: CEO Michael Lohscheller stated that the new financing will further enhance the company's liquidity and balance sheet, allowing Polestar to focus on achieving its sustainability goals after a record year of retail sales.
See More
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- Registration Decrease: In 2025, Tesla's registrations in California dropped to 179,656 from 202,865 the previous year, reflecting the first decline in overall EV registrations since 2020, highlighting a challenging market environment.
- Intensifying Competition: While other EV makers like Polestar and Rivian also saw declines in registrations, their market shares did not drop as significantly as Tesla's, suggesting a challenge to Tesla's leadership position in the market.
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