What occurred

Whereas shares of Freyr Battery (FREY 1.97%) charged larger to begin the week, any momentum that buyers hoped the inventory would carry into Tuesday got here to a halt when an analyst shared a bearish outlook on the electrical automobile (EV) battery inventory. Since then, shares have continued to slip though they’re bouncing again barely in the present day. 

For the reason that finish of final Friday’s buying and selling session, shares of Freyr are down 11.1% as of two:28 p.m. ET in the present day, in response to information supplied by S&P International Market Intelligence. 

So what

Taking a extra skeptical method to the prospects of Freyr’s inventory, Philipp Koenig, an analyst at Goldman Sachs, reduce his worth goal to $10 from $14 on Tuesday, downgrading the inventory to impartial from purchase. Based mostly on the inventory’s closing worth of $9.61 on Monday, Koenig’s worth goal implies upside of 4%. In keeping with Thefly.com, Koenig predicates the value goal and downgrade on the assumption that there can be a glut of battery provide in 2025, the yr when Freyr expects to begin operations at its gigafactories.

The inventory’s decline this week is a stark turnaround from the market’s embrace of Freyr final month when the inventory acquired bullish consideration from a separate analyst, and the corporate reported an necessary milestone in its pursuit of economic EV battery manufacturing.

Now what

Whereas the analyst’s dour outlook for Freyr’s inventory is disappointing many EV battery buyers this week, it is necessary to acknowledge that quite a bit can change in two years, and the circumstances which type the idea for Koenig’s worth goal and outlook can change significantly. Due to this fact, buyers could be higher off seeing what the corporate has to say when it stories second-quarter 2023 monetary ends in the approaching weeks.