Shares of Romeo Power (RMO), a maker of battery packs for electric commercial vehicles, were trading higher on Thursday. Investors have been bidding up the stock since a Wall Street analyst initiated coverage of the company with a bullish note earlier this week.
As of 11:30 a.m. EST, Romeo Power's shares were up about 11.4% from Wednesday's closing price.
In a note released after the U.S. markets closed on Monday, Cowen analyst Gabe Daoud initiated coverage of Romeo Power with a rating of outperform and a price target of $18.
Daoud wrote that he has a positive view of the electric vehicle battery sector as a whole, as he expects the electrification of mobility to drive "robust" demand for batteries through at least 2030. Within the group of companies making or developing batteries for EVs, Romeo Power is differentiated by its positioning "further downstream," making battery modules and packs for commercial vehicles.
Daoud expects Romeo Power to scale its manufacturing over the next few years, hitting gross margin of 30% to 35% in time as lower battery prices are offset by its increased scale and premium-level offerings.
Electric vehicle investors should note that the company did have some minor news on Thursday: Romeo Power has extended the deadline for holders of its public warrants to redeem the warrants for shares until 5 p.m. EST on April 5.
The warrants allow holders to buy a share of Romeo Power stock at $11.50. Investors holding the company's warrants should note: Unless you received them in a private placement, they'll be worth only a penny each after that April 5 deadline.