EV-Charging Stocks Are Hot. Which Ones Are the Best Bets?
Electric-vehicle charging stocks had a great week following passage of the Biden administration’s infrastructure bill and solid earnings reports from a couple of players. The price moves have Wall Street thinking about which stocks are the best bets.
Stock in EVgo (ticker: EVGO) led the way, up more than 89% last week. Shares rose about 35% this past Monday after the bill’s passage and another 27% in the days following its earnings report on Nov. 10.
Blink Charging (BLNK) rose 27% for the week and 13% after reporting third-quarter numbers on Nov. 11. Volta (VLTA) shares rose 35%. ChargePoint (CHPT) and WallBox (WBX) shares rose 9% and 2%, respectively. Wallbox lagged, but its shares jumped about 50% for the week three weeks ago.
EVgo is giving up some of last weeks gains, dropping about 7% in premarket trading after a downgrade to Hold from Buy by Credit Suisse analyst Maheep Mandloi. He actually raised his price target to $17 from $11, but couldn’t keep the Buy rating after the recent run. There is a lot going right for the company including the infrastructure bill as well as partnerships with General Motors (GM) and Uber Technologies (UBER), but the stock fully reflects those items, according to the analyst.
After the downgrade, three of seven, or 43%, of analysts covering EVgo stock rate shares Buy. The average Buy-rating ratio for small-capitalization stocks like EVgo is about 65%.
Blink stock is going the other way Monday. Shares were up 1.7% in premarket trading. S&P 500 and Dow Jones Industrial Average futures rose about 0.2% and 0.3%, respectively.
An upgrade from H.C. Wainwright analyst Sameer Joshi to Buy from Hold on Blink has shares moving. Joshi cited the money for EV-charging infrastructure as well as tax incentives to support buying EVs in his upgrade report.
His price target is now $50 a share. Before the Buy rating, Joshi didn’t have an official price target. With the new Buy, now five out of seven, or 71%, of analysts covering Blink stock rate shares Buy.
ChargePoint stock was rising as well in premarket trading, although investors are gettingn mixed messages from Wall Street. Shares were up about 1.2% after J.P. Morgan analyst Bill Peterson launched coverage with a Hold rating and $26 price target. Shares are at about $27 in premarket trading. But Evercore ISI analyst James West launched coverage with a Buy rating and $34 price target.
ChargePoint is the most valuable of the EV-charging stocks listed and Peterson believes its strong market position is reflected in valuation. West disagrees. He likes the company’s size and scale, relative to other players. ChargePoint “is viewed as an index for charging and investors look to it first for exposure to the sector given its scale, global reach, and being the ‘arms dealer’ for the industry,” wrote West in his report.
Overall, 10 out of 16, or 63%, of analysts covering ChargePoint shares rate them Buy.
All the analysts adjusting ratings Monday seem to believe the outlook for the sector is strong based on government support and rising EV sales. They are arguing about valuation.
No one changed ratings on Volta or Wallbox Monday. Volta stock is the most popular charging stock with four out of four, or 100%, of analysts rating share Buy. Still, four analysts is less than the other stocks have covering them.
Wallbox stock has one analyst covering it. Stifel analyst Stephen Gengaro rates shares Buy and has a $29 price target.
