Bank of America says this ‘best-in-class’ electric vehicle charging stock could rise 65%
Bank of America believes that charging company ChargePoint for electric cars is well positioned to exploit the tailwind from the industry and regulation. Analyst Alex Vrabel upgraded shares to buy from neutral. His new price target of $14 represents a 65% rally from Friday’s close. “The reason for our upgrade is simple – CHPT has proof of execution, sight line to profitability, and with its history largely unchanged since the PIPE offering, valuation is compelling against stocks making all-time lows,”[ads1]; Vrabel wrote in a Tuesday note. “CHPT [is] a best-in-class way to play [the] EV charging theme,” he added. ChargePoint’s shares have fallen nearly 19% in the quarter to date, and they are down 10.9% in 2023. Earlier this month, the stock hit a record low of $7.82 a share. Despite for the decline, Vrabel said the company’s fundamentals remain intact and that he is comfortable on the “line of sight of cash bending. CHPT ICLN YTD mountain ChargePoint Holdings shares have significantly underperformed in 2023. To be sure, he noted that Chargepoint has been one of the “worst performing” growth-focused names in 2023, even falling behind the iShares Global Clean Energy ETF ( ICLN), which has lost more than 6% so far this year. “We emphasize that while ChargePoint is theoretically a ‘clean energy’ company, its revenue drivers are broader, largely hinged on a secular narrative around the transition to EVs that is still in its early stages and provides an oversized line of sight for secular growth,” said Vrabel. “Given the company’s customer, geographic and product diversity, CHPT is a uniquely ‘broad’ investment in EV charging trends that we believe will withstand recessionary pressures across pockets of its customer base,” the analyst added. Shares rose 5% Tuesday in premarket trading. — CNBC’s Michael Bloom contributed to this report.
