What happened
While shares of Freyr Battery (FREY 5.70%) charged higher to start the week, any momentum that investors hoped the stock would carry into Tuesday came to a halt when an analyst shared a bearish outlook on the electric vehicle (EV) battery stock. Since then, shares have continued to slide although they're bouncing back slightly today.
Since the end of last Friday's trading session, shares of Freyr are down 11.1% as of 2:28 p.m. ET today, according to data provided by S&P Global Market Intelligence.
So what
Taking a more skeptical approach to the prospects of Freyr's stock, Philipp Koenig, an analyst at Goldman Sachs, cut his price target to $10 from $14 on Tuesday, downgrading the stock to neutral from buy. Based on the stock's closing price of $9.61 on Monday, Koenig's price target implies upside of 4%. According to Thefly.com, Koenig predicates the price target and downgrade on the belief that there will be a glut of battery supply in 2025, the year when Freyr expects to commence operations at its gigafactories.
The stock's decline this week is a stark turnaround from the market's embrace of Freyr last month when the stock received bullish attention from a separate analyst, and the company reported an important milestone in its pursuit of commercial EV battery production.
Now what
While the analyst's dour outlook for Freyr's stock is disappointing many EV battery investors this week, it's important to recognize that a lot can change in two years, and the conditions which form the basis for Koenig's price target and outlook can change considerably. Therefore, investors would be better off seeing what the company has to say when it reports second-quarter 2023 financial results in the coming weeks.
