Morgan Stanley Initiates Research Coverage on EV Battery Names FREYR (FREY) and Microvast (MVST) On Opposite Sides of the Spectrum

August 4, 2021 11:20 AM EDT
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Morgan Stanley has expanded their coverage to include two de-SPACd EV battery startups - FREYR Battery (NYSE: FREY) and Microvast Holdings, Inc. (NASDAQ: MVST), with Overweight and Underweight ratings, respectively.

As Morgan Stanley surveys the EV/battery startup landscape, analyst Adam Jonas says that they are “prioritizing strong management teams and highly differentiated technology and/or business models with a path to scale at an acceptable level of risk.”

Morgan Stanley is attracted to FREY’s Norway-supported renewable manufacturing angle as it helps mitigates some important environmental externalities associated with the EV ecosystem. Jonas believes FREY offers a more compelling strategy and favorable risk-reward skew. Morgan Stanley initiated FREY with an Overweight rating and an $18 price target.

Jonas believes that MVST’s vertically integrated model carries greater execution, along with some competitive and in-sourcing risks. Jonas views Microvast as more of a proprietary technology venture that, under some scenarios, has the potential to scale profitably. MVST currently generates revenue by selling cells and packs for mostly Chinese production. The company’s potential with bigger players intrigued Morgan Stanley. However, Jonas believes that the company faces greater competition and higher tech/execution risk leading to an initial rating of Underweight, with a $6 price target.

By Michael Elkins |

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