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A Tesla Bull Has a New Top Pick. It’s a Battery Start-Up With 300% Upside.

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Freyr can be a serious battery player in years to come, says Morgan Stanley’s Adam Jonas.


Stock in Norwegian battery start-up

Freyr Battery

is getting a boost from a new bullish call from a Wall Street automotive analyst.

Wednesday, Morgan Stanley analyst Adam Jonas raised his stock-price target for Freyr (ticker: FREY) to $26 from $18 a share and named the company his top pick. He had rated the stock at Buy even before his latest call.

That $26 figure is his base price. Jonas also includes bull and bear scenarios. His most bullish forecast is $60 a share. That’s up more than 300% from recent levels—a four-bagger, in Wall Street parlance. His bear case is $4 a share.

Freyr stock was up 15%, at $15.10, in recent trading. The

S&P 500

Dow Jones Industrial Average
were up 0.7% and 0.6%, respectively.

Freyr is focusing on producing rechargeable lithium-ion batteries for the electric-vehicle and energy-storage markets. Its technology uses less materials and time, saving costs. That’s just one of the things Jonas likes about the company.

The company is also opening a new battery plant in Norway, called Giga Arctic, that will have the capacity to manufacture about 29 gigawatt hours of battery capacity annually. That is enough to power roughly half a million EVs a year.

Jonas’s bull case sees capacity growing to 300 gigawatt hours by 2035. His bear case assumes Freyr opens only about 80 gigawatt hours of capacity by then.

The company also has entered into a partnership with

Hana Technology
which makes equipment used in battery production. And it has signed a deal with


(6594.Japan) for the maker of electric motors to buy Freyr battery cells.

Freyr can move from being “a small Norwegian battery start-up” to a serious battery player later in the decade, Jonas wrote in a research report.

Freyr replaces


(RACE) as Jonas’s top pick. He still rates the latter’s shares at Buy and has a $300 price target for that stock. Jonas also rates


(TSLA) shares at Buy, with a price target of $383.

Seven of eight, or 88%, of the analysts covering Freyr stock rate the shares at Buy. The average Buy-rating ratio for stocks in the S&P 500 is about 58%.

Freyr, of course, isn’t in the S&P 500 because it is too small. The company isn’t expected to generate significant sales for years.

At Jonas’s target price of $26, Freyr would have a market capitalization of roughly $3 billion. The average analyst price target is just under $21 a share, but that is still about 59% above recent levels.

Coming into Wednesday trading, Freyr stock is up about 18% so far this year, boosted by the passage of the Inflation Reduction Act, which has helped a lot of renewable and energy-storage stocks. The shares have gained more than 50% since the July announcement of the surprise agreement between Sens. Chuck Schumer (D., N.Y.) and Joe Manchin (D., W.Va.) that allowed the legislation to pass the Senate.

Write to Al Root at

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