Markets nudged north to start the trading session this morning, but there's a buying bonanza currently underway for electric-vehicle (EV) battery stock Freyr Battery (FREY -3.46%). The shares closed 3.4% higher on Wednesday after the company announced a new partnership, and it seems that enthusiasm is continuing. Plus, Goldman Sachs announced a bullish stance on the stock yesterday after the market closed, leaving investors to show their approval today.
As of 10:31 a.m. ET on Thursday, shares of Freyr are up 16.6%.
Freyr announced yesterday that it has selected Hana Technology to help with equipment and automation solutions regarding the development of the company's Customer Qualification Plant (CQP) in Norway. With final equipment deliveries expected by the end of 2022, Freyr expects to accelerate sample cell production at the CQP in the first quarter of 2023. Additionally, Freyr reported that Hana Technology will assist in the development of Freyr's planned gigafactories.
The greater catalyst for the stock's rise today, though, stems from an auspicious view of where shares are headed. Philipp Koenig, an analyst at Goldman Sachs, upgraded Freyr's stock to buy from neutral, lifting the price target to $19 from $11. Based on the stock's opening price today of $10.45, Koenig's new price target implies upside of 82%. According to Thefly.com, Koenig based the higher price target, in part, on the belief that the Inflation Reduction Act will help the company reduce expenses at its new gigafactory, a battery factory slated to start operations in 2025.
There are bound to be many winners from the growing adoption of EVs, and it's quite possible that Freyr finds itself among the companies that prosper. It's important to recognize that this growth stock is a high-risk investment. Potential investors, therefore, should dig deeper to see if this is the right stock to power their portfolios.