Freyr Battery Sees A Jolt After BofA Initiates Coverage With Buy Rating: What You Need To Know

Battery manufacturer Freyr Battery SA FREY is set to become a major player in the gigafactory industry.

So much so, that shares of Freyr jumped nearly 6% higher during Friday’s premarket session after analysts at Bank of America Global Research initiated coverage on the stock.

The BofA Analyst: The investment bank’s equities research analyst Julien Dumoulin-Smith initiated Freyr with a buy rating, and a $13 price target.

Check out more analyst ratings, here. 

Dumoulin-Smith said in a Friday buy note to investors that Freyr is expected to turn committed offtake into bankable offtake, which could then lead to project financing. This could see Freyr turn its gigascale aspirations into reality.

The company has already secured a sanctioned project for 29GWh in Norway and a planned 34GWh (and eventually 50GWh) in the U.S.

Freyr’s cell design, developed at MIT, is optimized for the stationary storage market, which is set for significant growth in the coming years. This could be a significant catalyst for the stock.

Freyr is the closest company to European peer Northvolt, Dumoulin-Smith noted, which has grown from an idea in 2017 to a $12 billion valuation in 2022. The company has a 38GWh binding contract and over 100GWh of conditional offtake, which equates to over $14 billion in booked and prospective orders.

The management team at Freyr has been active since its 2021 PIPE offering and holds a series of supply allocations for raw materials, equipment, and inspection services. With two sites formally announced in Mo i Rana, Norway and Coweta County, Georgia, the analyst said Freyr has laid the groundwork for success.

BofA said the company's position and valuation make it an attractive proposition for investors looking to tap into the storage theme.

However, it is important to note that with continued cash burn ahead of revenue inflection, the risk of investment is significant, so investors should be mindful of the risk/reward skew.

Price action: Shares of Freyr are trading 5.77% higher to $8.98 during Friday’s premarket session, according to data from Benzinga Pro.

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