What happened
Shares of Freyr Battery (FREY 5.38%) had soared by about 16% as of 12:10 p.m. ET Wednesday after Morgan Stanley analyst Adam Jonas hiked his price target on the small Norwegian battery start-up, and called it his top pick among North American auto stocks.
Freyr has a number of projects coming together that will transform the company into "a real player in the global battery economy later this decade," Jonas asserted in a research note to investors.
Image source: Freyr Battery.
So what
Freyr is looking to break into the industrial and electric vehicle battery market in a big way. According to TheFly.com, Jonas' research note points out the battery maker has agreed to begin construction of its new Giga Arctic battery production facility in Norway; entered into a strategic partnership with South Korea's Hana Technology, which makes precision automation solutions for battery factories; selected new equipment suppliers; and signed a binding offtake agreement for 38 gigawatt-hours of battery cells with energy storage solutions company Nidec.
Freyr has developed an innovative semi-solid lithium-ion battery manufacturing technology. Its batteries will be manufactured in Norway using hydroelectric power to produce utility-scale energy storage products.
Now what
Freyr announced these deals in quick succession as it seeks to quickly ramp up production, which caught Jonas' eye. He set his one-year price target on the stock at $26 per share, for an implied 100% gain over Tuesday's closing price. However, amid the various bullish and bearish cases for the company, Jonas' has a high-end potential valuation of $60 per share on Freyr, and a low-end mark of $4 per share.
