In this article, we discuss the 11 most promising EV battery stocks according to analysts. To skip the detailed analysis of the EV battery industry, go directly to the 5 Most Promising EV Battery Stocks According to Analysts. The...
In this article, we discuss the 11 most promising EV battery stocks according to analysts. To skip the detailed analysis of the EV battery industry, go directly to the 5 Most Promising EV Battery Stocks According to Analysts.
The global push toward clean energy has been mainly due to climate concerns. From a financial perspective, oil and gas have been unreliable over the past few years. While the oil and gas industry has made some investors very rich, the volatility has negatively affected the economy.
Oil prices experienced a heavy slump in 2020 to reach record highs in 2022. Stimulus payments due to the pandemic, paired with the jump in oil prices, threw the US economy into chaos. The oil prices dialed down in 2023, and the economy also showed signs of recovery on the back of the technology sector. Then the Middle East conflict made the world hold its breath again as it readied for another oil price surge and a blow to the economy. Fortunately, it didn’t happen. The uncertainty of oil prices due to foreign wars and production cuts, paired with climate concerns, make a perfect case for the US to shift toward renewable energy and electric mobility.
The electric vehicle (EV) and battery stocks lagged behind the market in 2023. KraneShares Electric Vehicles & Future Mobility ETF tracks companies directly involved in EV and EV component production and is down 9.8% year-to-date (YTD) as of December 21. While the funds’ biggest EV stock, Tesla, Inc. (NASDAQ:TSLA), performed exceptionally well this year, the biggest EV battery stock, Albemarle Corporation (NYSE:ALB), had quite a rough time. The former is up 135.43%, and the latter showed a 32.19% YTD deficit.
Due to slower-than-expected EV sales growth and over-supply of lithium, the metal’s price went down drastically this year. Lithium prices reached a record of nearly 600,000 CNY (1 CNY = 0.14 USD) per tonne by November 2022 and are now below 100,000 CNY per tonne on December 21. On the other hand, while EV growth was not up to par, in the third quarter of 2023, US sales volumes crossed 300,000 for the first time and are likely to hit the million units mark in 2023. Schmidt Automotive Research expects EV growth to plateau next year and bounce back strongly in 2025 and 2026.
While several analysts keep a bearish view of lithium over the next couple of years, the long-term demand for lithium looks quite promising. Government subsidies around the world and regulatory changes are creating an EV future, leading to a rise in demand for the metal. Experts predict that 90% of total passenger car sales will be electric in several countries by 2030.
Moreover, projections suggest that the global lithium market will be $89.9 billion by 2030 from $37.8 billion in 2022, registering a compound annual growth rate of 22.1%. The International Energy Agency predicts that demand for battery-grade lithium is expected to increase by 40 times between 2020 and 2040. EV and battery companies are positive about demand over the next few years. Felipe Smith, Sociedad Química y Minera de Chile S.A. (SQM)‘s Commercial Vice President of Lithium division, said at the company’s Q3 2023 earnings call:
“So well, the demand fundamentals remain solid in the long-term. We are convinced about that, with an annual average growth above 20% for the next 5 years, okay. We expect EV sales of around 14 million units this year, which represents still a growth of around 45% compared to last year.”
While expert analysis suggests that the EV and battery market will take time to recover, some of the most promising EV and battery stocks according to analysts include Microvast Holdings, Inc. (NASDAQ:MVST), American Lithium Corp. (NASDAQ:AMLI), and Amprius Technologies, Inc. (NYSE:AMPX).
Our Methodology
For this article, we identified nearly 30 EV battery stocks. Next, we chose the stocks with the highest average analyst price target upside as of December 21. The analyst price targets were taken from TipRanks.
We only chose the companies that were covered by at least two analysts and didn’t have many Hold or Sell ratings as compared to Buy-equivalent ratings. The most promising EV battery stocks according to analysts are listed in ascending order of their average analyst price target upside.
Insider Monkey tracks data from around 900 elite hedge funds. Hedge funds’ top 10 consensus stock picks outperformed the S&P 500 Index by more than 140 percentage points over the last 10 years (see the details here). That’s why we pay very close attention to this often-ignored indicator.
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Most Promising EV Battery Stocks According to Analysts
11. Albemarle Corporation (NYSE:ALB)
Stock Price: $145.45
Average Analyst Price Target: $179.37
Average Analyst Price Target Upside: 23.32%
Albemarle Corporation (NYSE:ALB) is a North Carolina-based company that works on catalysts, lithium compounds, and bromine and derivatives. The company is a top leader among lithium producers and a big name in the EV market.
Albemarle Corporation (NYSE:ALB) was covered by 19 Wall Street analysts over the last three months, and 13 kept a Buy rating on the stock. As of the December 21 market close, the average price target of $179.37 represented an upside of 23.32%.
Albemarle Corporation (NYSE:ALB) is one of the most promising EV battery stocks according to analysts, along with Microvast Holdings, Inc. (NASDAQ:MVST), American Lithium Corp. (NASDAQ:AMLI), and Amprius Technologies, Inc. (NYSE:AMPX).
The London Company mentioned Albemarle Corporation (NYSE:ALB) in its third quarter 2023 investor letter. Here is what it said:
“Albemarle Corporation (NYSE:ALB) – ALB underperformed due to declining lithium spot prices in the quarter. We remain attracted to ALB, reflecting its low cost position in two consolidated industries (lithium & bromine). However, we recognize quarterly results can be volatile, driven by short-term supply-demand dynamics for the underlying commodities. It is important to note that ALB’s favorable position on the cost curve means the company can likely maintain healthy profitability even at trough prices.”
10. Sigma Lithium Corporation (NASDAQ:SGML)
Stock Price: $33.20
Average Analyst Price Target: $41.84
Average Analyst Price Target Upside: 26.02%
Sigma Lithium Corporation (NASDAQ:SGML) is a Canadian lithium producer, and its product finds application in the EV battery industry. With a 26.02% average analyst price target upside, it is one of the most promising EV battery stocks.
Sigma Lithium Corporation (NASDAQ:SGML) was owned by 15 hedge fund investors at a combined stake value of over $102 million.
On November 16, Sigma Lithium Corporation (NASDAQ:SGML) announced its third-quarter earnings result with net income of $36.4 million or $0.33 per diluted share outstanding. The revenue was $96.9 million, and the company ended the quarter with $28.2 million in cash and cash equivalents.
9. Livent Corporation (NYSE:LTHM)
Stock Price: $16.44
Average Analyst Price Target: $23.20
Average Analyst Price Target Upside: 41.12%
Livent Corporation (NYSE:LTHM) is a Pennsylvania-based company that carries out the extraction, processing, and production of finished lithium products.
On December 19, Livent Corporation (NYSE:LTHM) announced that its and Allkem (OTC:OROCF)’s shareholders have approved the merger of equals transaction to create a stronger lithium producer called Arcadium Lithium, valued at $10.6 billion. The deal announcement came in May 2023, and the merger is expected to close on January 4, 2024.
According to Insider Monkey’s database that tracks 910 elite hedge funds, 24 funds had investments in Livent Corporation (NYSE:LTHM)’s stock in the third quarter. Israel Englander’s Millennium Management was the top investor in the company and increased its stake by 471% to 2.8 million shares worth $52.041 million.
First Pacific Advisors commented on Livent Corporation (NYSE:LTHM) in its third quarter 2023 investor letter. Here is what it said:
“Livent Corporation (NYSE:LTHM) is an integrated, low-cost lithium producer that was spun out from FMC in 2018. This is an unusual investment for us – we normally avoid the commodity and materials sectors and have kept our position in Livent small. But we believe Livent has a unique position in an industry with a strong long-term outlook. The company generates cash, is virtually debt-free (as of Sep 30, 2023), and has considerable capacity additions planned near-term. In May, Livent announced an all-stock combination with Australia’s Allkem that should add scale, allow for cost reductions, and help consolidate the market. 25 The company’s share price has declined along with lithium prices despite Livent’s relatively long-term contracts and reiteration of 2023 guidance.”
8. Lithium Americas Corp. (NYSE:LAC)
Stock Price: $6.48
Average Analyst Price Target: $12.27
Average Analyst Price Target Upside: 89.35%
Lithium Americas Corp. (NYSE:LAC) is a Canadian company that is involved in the manufacturing of lithium batteries and other products and is focused on advancing its Thacker Pass mine.
Of the 9 Wall Street analysts that covered Lithium Americas Corp. (NYSE:LAC) over the last three months, 8 maintained a Buy rating on the stock. The average price target of $12.27 had an upside of 89.35% as of the December 21 market close.
On November 15, National Bank analyst Lola Aganga started coverage of Lithium Americas Corp. (NYSE:LAC)’s stock with an Outperform rating and C$16 price target. The analyst justified the rating based on the U.S.-based lithium project in the company portfolio and its potential to manage organic growth.
Lithium Americas Corp. (NYSE:LAC) was mentioned in Massif Capital’s first-quarter 2023 investor letter. Here is what it said:
“During the first quarter, Lithium Americas Corp. (NYSE:LAC) had several positive events, including a favorable record of decision ruling for Thacker Pass, paving the way for construction of the mine to start, a revised Thacker resource/cost estimates, and GM’s financing/offtake agreement. Even though LAC is non-producing and its stock is down 34% over the past year (compared to the larger lithium producer’s 3%), the stock remains one of our favorites with multiple catalysts (and still up roughly 600% from our initial purchase price):
Cauchari-Olaroz Stage I first production in sight and Stage II initiation by year-end,
Substantial earthworks beginning 2H23 at Thacker,
Growth potential with greater guidance on Pastos Grandes, and
Formal separation of North American Assets and Argentine assets into separate publicly traded entities
As Cauchari-Olaroz in Argentina and Thacker Pass come online, volumes will effectively be marked at leading-edge pricing. As such, it seems prudent to continue underwriting growth, especially given the firm’s experienced management team with a visible pipeline to incremental supply before 2025. These qualities make one or both post-separation entities attractive buyout targets for numerous suitors…” (Please click here to read the full text)
7. Piedmont Lithium Inc. (NASDAQ:PLL)
Stock Price: $29.63
Average Analyst Price Target: $61.33
Average Analyst Price Target Upside: 106.99%
Piedmont Lithium Inc. (NASDAQ:PLL) is a North Carolina-based company that runs a multi-asset, integrated lithium business.
In the third quarter, Piedmont Lithium Inc. (NASDAQ:PLL) announced its third-quarter earnings result with a non-GAAP EPS of $0.88 and revenue of $47.1 million. In its Q3 2023 earnings call, Piedmont Lithium Inc. (NASDAQ:PLL) mentioned that it is on track to fulfill the full-year shipment guidance of approximately 56,500 dry metric tonnes of lithium concentrate.
In the third quarter, 10 hedge funds had a stake in Piedmont Lithium Inc. (NASDAQ:PLL)’s stock at a combined value of $43.729 million.
On November 9, B. Riley analyst Matthew Key lowered the price target on Piedmont Lithium Inc. (NASDAQ:PLL)’s stock to $53 from $57 and maintained a Buy rating on the shares.
6. Enovix Corporation (NASDAQ:ENVX)
Stock Price: $13.85
Average Analyst Price Target: $31.57
Average Analyst Price Target Upside: 127.94%
Enovix Corporation (NASDAQ:ENVX) is a California-based firm that develops and manufactures 3D silicon lithium-ion rechargeable batteries.
According to the Malaysian Investment Development Authority, Enovix Corporation (NASDAQ:ENVX) agreed to invest nearly $1.23 billion (5.8 billion ringgit) for the establishment of a high-volume manufacturing facility in Malaysia.
Enovix Corporation (NASDAQ:ENVX) was covered by 9 Wall Street analysts, and 8 kept a Buy rating on the stock. As of the December 21 market close, the average price target of $31.57 represented an upside of 127.94%.
Microvast Holdings, Inc. (NASDAQ:MVST), American Lithium Corp. (NASDAQ:AMLI), and Amprius Technologies, Inc. (NYSE:AMPX), are some of the most promising EV battery stocks according to analysts besides Enovix Corporation (NASDAQ:ENVX).
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