What happened
While the S&P 500 and Dow Jones Industrial Average are both inching higher to start today's trading session, there's no doubt about investors' enthusiasm for Freyr Battery (FREY 5.70%). The stock is ripping higher today thanks to the general ebullience for EV stocks as well as an analyst's bullish opinion of the lithium-ion battery company.
As of 10:51 a.m. ET on Thursday, shares of Freyr are up 20.2%.
So what
Adam Jonas, an analyst at Morgan Stanley, was impressed with Freyr's recent Capital Markets Day presentation, and sees significant upside to its stock. Besides upgrading it to overweight from equal weight, Jonas reaffirmed a $13 price target.
Based on the stock's recent closing price of $7.55, that implies upside of 72%. According to Thefly.com, Jonas predicated his outlook on a "number of material milestones" that the company highlighted during the presentation.
For one, Freyr announced that it has made progress at its Customer Qualification Plant, a demonstration production line that the company will use for training purposes before its gigafactories open. Freyr expects to ramp up process automation, production, and testing of chargeable cells in the second half of 2023.
And the company reported that "customer sales pipelines across the Energy Storage Systems, commercial mobility, and passenger EV segments are growing rapidly."
Now what
While the analyst's bullish outlook on Freyr's stock is encouraging, investors should recognize the risks in this EV battery stock before choosing to power their portfolios with it.
Freyr has made significant progress in advancing toward commercial battery production, but the company still has a lot to accomplish. Building a large-scale battery factory is no small feat. Until the company has achieved commercial production, this speculative stock should only draw the attention of those comfortable with a higher degree of risk.
