A Tesla Bull Has a New Top Pick. It's a Battery Start-Up. -- Barrons.com
8:49 am ET September 21, 2022 (Dow Jones) Print
Al Root
Stock in Norwegian battery start-up FREYR Battery is getting a boost from a new bullish call from a Wall Street automotive analyst.
Wednesday, Morgan Stanley analyst Adam Jonas raised his stock-price target for FREYR (ticker: FREY) to $26 from $18 a share and named the company his top pick. He had rated the stock at Buy even before his latest call.
FREYR stock gained more than 5% in premarket trading. Futures on the S&P 500 and Dow Jones Industrial Average were up 0.2% and 0.3%, respectively.
FREYR is focusing on producing rechargeable lithium-ion batteries for the electric-vehicle and energy-storage markets. Jonas sees a lot going right for the company.
To begin with, there is a new battery plant coming in Norway called Giga Arctic that will have the capacity to manufacture about 29 gigawatt hours of battery capacity annually. That is enough to power roughly half a million EVs a year.
The company also has entered into a partnership with Hana Technology, which makes equipment used in battery production. And it has signed a deal with Nidec (6594.Japan) for the maker of electric motors to buy FREYR battery cells.
FREYR can move from being "a small Norwegian battery start-up" to a serious battery player later in the decade, wrote Jonas in a research report.
FREYR replaces Ferrari (RACE) as Jonas's top pick. He still rates the auto manufacturer's shares at Buy and has a $300 price target for that stock. Jonas also rates Tesla (TSLA) shares at Buy, with a target of $383 for the price.
Seven of eight, or 88%, of the analysts covering FREYR stock rate the shares at Buy. The average Buy-rating ratio for stocks in the S&P 500 is about 58%.
FREYR, of course, isn't in the S&P 500 because it is too small. The company isn't expected to generate significant sales for years.
At Jonas's target price of $26, FREYR would have a market capitalization of roughly $3 billion. The average analyst price target is just under $21 a share, but that is still about 59% above recent levels.
Coming into Wednesday trading, FREYR stock is up about 18% so far this year, boosted by the passage of the Inflation Reduction Act, which has helped a lot of renewable and energy-storage stocks. The shares have gained more than 50% since the July announcement of the surprise agreement between Sens. Chuck Schumer and Joe Manchin that allowed the legislation to pass the Senate.
Write to Al Root at allen.root@dowjones.com
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