IRA Beneficiary FREYR Battery a Morgan Stanley Top Pick

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By Sam Boughedda

A Morgan Stanley analyst kept shares of FREYR Battery (NYSE:FREY) at Overweight but increased the price target to $26 from $18, labeling it a Top Pick. The firm's bull case is $60 per share.

The analyst said the company is an Inflation Reduction Act beneficiary, and the last few months have been "rife with exciting announcements" for investors who have had the small Norwegian battery start-up on their radar.

"Between 1) sanctioning construction of Giga Arctic in late June (which came with $1.6bn in identified debt financing support and expanding the facility size to 29 GWh), 2) entering a strategic partnership with Hana Technology, 3) selecting NTE Process and Mpac Group as equipment suppliers, 4) signing a binding offtake agreement for 38 GWh of battery cells with Nidec, in addition to forming a module and pack JV, and 5) the passage of the IRA in the US, we think, the environment is becoming ripe for FREY to become a real player in the global battery economy later this decade," said the analyst.

On the Inflation Reduction Act, the analyst said the firm believes "the on-shoring theme spurred by the IRA will help incentivize EV and battery production domestically."

"Coming out of our Laguna conference, we feel reinvigorated in our view that the confluence of (a) energy transition and (b) on-shoring will drive the biggest capex cycle of the century: the Mother of All Capex Cycles (aka the 'MACC')," added the analyst.