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- Morgan Stanley has downgraded FREYR Battery (NYSE:FREY) to equal-weight from overweight citing risks to tech, strategy, and funding.
- The firm cut its price target to $2 from $13 (~14% upside based on Monday's close).
- Analyst Adam Jonas said he has been attracted to the stock before for several reasons. The first was its operation in Norway that "offered advantages to FREY’s battery strategy through attractively priced, renewable electrical energy resources, unique access to essential battery raw materials, highly skilled workforce familiar with large-scale infrastructure projects."
- He added that the company's decision to use 24M semi-solid technology "promised superior manufacturing costs and energy density." Also, its expansion would rely on billions in funding from government grants, loans, project financing, and incentives.
- Jonas also noted that the end market for stationary storage has shown high growth.
- However, given FREYR's (FREY) Q3 results and discussions with management, those positive attributes are now at risk, he added.
- Investment in the Norwegian gigafactory, Giga Arctic, has been paused, a plant based on 24M technology is facing significant delays, the funding outlook has deteriorated, and the company is facing supply, demand, cost, and execution pressures.