Why Are Battery Manufacturing Company EnerSys Shares Shooting Higher Today?

Zinger Key Points
  • The proposed regulations provide additional clarification on methodology for calculating tax credits.
  • Oppenheimer raises price target from $110 to $116.

Energy solutions provider EnerSys ENS shares are trading higher after it updated its third quarter fiscal 2024 adjusted EPS guidance from $1.80 - $1.90 to $2.50 - $2.60.

The update follows the December 14, 2023, issuance of proposed regulations by the U.S. Department of the Treasury regarding the Advanced Manufacturing Production Credit - Section 45X of the Internal Revenue Code.

The regulations provide additional clarification on the methodology for calculating capacities of batteries that qualify for tax credits.

The regulations, EnerSys said, will result in more of its product sales than previously anticipated to qualify for the related tax credits.

Hence, the company now expects the annual tax credits to be $120 million - $160 million versus the previous outlook of $80 million - $120 million.

"EnerSys's eligibility for Section 45X credits emphasizes the critical role our products play in helping to drive the global energy transition," said President & CEO David M. Shaffer.

Oppenheimer analyst Noah Kaye reiterated an Outperform rating on the shares of EnerSys and raised the price target from $110 to $116.

The analyst says the $0.70 increase to F3Q EPS guidance midpoint benefits from a three-quarter lookback on the higher credits, partly mitigated by greater decline in telecom customer spend.

Price Action: ENS shares are trading higher by 5.15% at $101.73 on the last check Wednesday.

Market News and Data brought to you by Benzinga APIs
Comments
Loading...
date
ticker
name
Price Target
Upside/Downside
Recommendation
Firm
Posted In: Analyst ColorEquitiesNewsGuidancePrice TargetReiterationMarketsAnalyst RatingsMoversTrading IdeasBriefsExpert Ideaswhy it's moving
Benzinga simplifies the market for smarter investing

Trade confidently with insights and alerts from analyst ratings, free reports and breaking news that affects the stocks you care about.

Join Now: Free!