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FREYR Battery (NYSE:FREY) shares were upgraded to Buy from Neutral, with its price target raised to $19 from $11 by a Goldman Sachs analyst on Thursday.
FREYR shares are up more than 16% at the time of writing.
The analyst told investors in a research note that they see the company as a strong beneficiary of the recently enacted Inflation Reduction Act (IRA) in the US, and the act could “reduce Giga America capex by >60%.”
“FREY aims to build a 35GWh gigafactory in partnership with Koch Strategic Platforms (KSP) that is set to start production in 2025. Looking at the IRA in more detail, we see a potential capex reduction for FREY’s upcoming gigafactory (Giga America) by >60%. Given FREY’s initial focus on LFP batteries, we also see strong potential from the new ITC for standalone storage,” wrote the analyst.
He added that when analyzing the competitive landscape in the US, the company is set to operate the “largest gigafactory outside of the OEMs’ dedicated EV battery plant.”
“We see several catalysts for FREY’s stock for the remainder of the year, including (1) site selection for Giga America, (2) Final Investment Decision for Giga Arctic and (3) conversion of >125GWh offtake agreements into definitive sales agreements. Post the progress on Giga Arctic and the IRA enactment, we increase our FREY estimates on better capacity assumptions for Giga Arctic,” concluded the analyst.
