Energy & Critical Metals
The 7 Best Battery Stocks to Buy for February 2023
Although electric vehicles are all the rage these days, investors should also think infrastructurally for profits, thus boding well for the best battery…
Although electric vehicles are all the rage these days, investors should also think infrastructurally for profits, thus boding well for the best battery stocks to buy for Feb. Fundamentally, it’s difficult to figure out which EV brand will win out in the end. Ultimately, as the decades pass by, the industry will likely consolidate to a select few players.
Further, consumer tastes will always vary. A brand that might be incredibly popular for one decade might not be relevant the next. Therefore, if you do select an automotive brand as one of the best battery stocks to buy, the underlying enterprise should feature a diversified business. You just never know what’s going to happen in this sector.
Specific to this list of battery players, they each carry varying degrees of financial risk. However, everyone enjoys a consensus view of buy or its equivalent. Therefore, you can approach these best battery stocks to buy with a measure of confidence.
Source: Khairil Azhar Junos/Shutterstock.com
Symbolizing the king of EVs, perhaps a discussion on the best battery stocks to buy would not be complete without mentioning Tesla (NASDAQ:TSLA). True, the company primarily earned its reputation for building compelling EVs. However, as a Reuters article mentioned, the company continues to research advanced battery technologies, in large part to cut costs.
For full disclosure, Tesla represents a bit of a mixed story in 2023. On one hand, shares gained nearly 76% of equity value since the January opener. While incredibly impressive, it’s hard to ignore that TSLA started off the new year with a low comparison. By that, I’m referring to the stock’s trailing one-year performance, where it lost 37%.
Still, Tesla represents a growth and earnings machine. As well, it currently enjoys outstanding stability in its balance sheet. Finally, Wall Street analysts peg TSLA as a consensus moderate buy. And it’s worth noting that hedge funds love Tesla. Therefore, it’s one of the best battery stocks to buy.
Source: Vova Shevchuk / Shutterstock.com
A jack-of-all-trades industrial and applied sciences conglomerate, Honeywell (NASDAQ:HON) offers a critical advantage among the best battery stocks to buy. No matter where the economy heads, Honeywell’s robust diversity should keep it relevant. As far as battery technology is concerned, the company provides sensor offerings to enhance safety in EV batteries.
To be fair, HON doesn’t rate as a particularly exciting investment. For instance, the market prices HON at a trailing multiple of nearly 28, which is overvalued. As well, its three-year revenue growth rate of 1.1% ranks worse than average for the sector. However, Honeywell represents a profitability machine, with a net margin of 14%. This stat ranks higher than nearly 83% of its peers.
Presently, Wall Street analysts peg HON as a consensus moderate buy. In addition, their average price target stands at $221.92, implying an upside potential of 9.49%. For a stable idea among the best battery stocks to buy, Honeywell offers a decent option.
Source: josefkubes / Shutterstock.com
Undoubtedly, Toyota (NYSE:TM) garnered plenty of flak recently over its refusal to go all-in on EVs. Indeed, the Japanese automaker’s stubbornness created strange bedfellows, namely the conservative-leaning Fox News. Editorialists there essentially supported Toyota’s bold decision to not cave into the EV mafia or at least that’s sorta the political framing.
Anyways, Fox News viewers should note that Toyota isn’t against EVs. It just wants to provide consumers with options since the full EV integration concept hardly rates as guaranteed. Moreover, Toyota is hard at work on a solid-state battery, which should have significant implications for the global EV rollout. Such research and development also make TM one of the best battery stocks to buy.
No matter what Toyota decides, it’s probably not going anywhere anytime soon. Wall Street analysts apparently agree, pegging TM as a consensus moderate buy. Moreover, their average price target stands at $161.99, implying an upside potential of nearly 12%. Again, it’s a solid idea for the best battery stocks to buy.
General Motors (GM)
Source: Katherine Welles / Shutterstock.com
Another legacy automotive giant, General Motors (NYSE:GM) may be the best car company in the world right now. I say that because it’s perfectly serving two communities. First, GM’s electrifying its marquee models such as the iconic Hummer, which should boost demand. Second, it stays true to its combustion-powered core, delivering the mid-engine eighth-generation Corvette, the affordable supercar.
For that, General Motors earned my props. However, investors should target the company as one of the best battery stocks to buy. Like its rival Toyota, GM invested considerably in researching and developing advanced EV battery technologies. With its Ultium battery, it might be able to change the game, especially when combined with GM’s modular EV platform.
I’m not just loving GM. Rather, Wall Street analysts weighed in positively as well, pegging shares as a consensus moderate buy. Moreover, their average price target stands at $49, implying an upside potential of over 19%.
Source: Epic Cure / Shutterstock
During the 1980s and 1990s, Panasonic (OTCMKTS:PCRFY) garnered fame as one of the top Japanese consumer electronics firms. In the decades before Apple (NASDAQ:AAPL) introduced its i-Whatever products, Japan Inc dominated. Nowadays, Panasonic focuses on its power plants, making it unquestionably one of the best battery stocks to buy.
As myriad publications pointed out, Panasonic has a longstanding partnership with Tesla. However, to put it in a non-politically correct term, Tesla represents the better-looking one in the relationship. But then, this also means that investors can pick up PCRFY shares for relatively cheap. As an example, the market prices shares at a forward multiple of 9.86. As a discount to forward earnings, Panasonic ranks better than nearly 80% of the competition.
Just as well, according to the Wall Street Journal, analysts peg PCRFY as a consensus overweight (buy equivalent) view. Further, their average price target stands at $10.77. Against the time of writing, this forecast implies an upside potential of nearly 23%.
FREYR Battery (FREY)
Source: Chompoo Suriyo / Shutterstock.com
Moving into the riskiest portion of the best battery stocks to buy, speculators may want to target FREYR Battery (NYSE:FREY). Focusing on decarbonizing the energy and transportation industries, Freyr specializes in high-density and cost-competitive battery cells for stationary energy storage (ESS), electric mobility, and marine applications.
What’s remarkable about FREY compared to other higher-risk direct-play battery providers is its market stability. For instance, in the trailing year, FREY gained about two-thirds of a percent of equity value. It’s not much of anything but it’s also certainly not a loss. Since the Jan. opener, FREY gained over 6%.
To be fair, prospective investors must have high conviction that Freyr’s underlying narrative will pan out. As a pre-revenue enterprise, market participants shouldn’t put all their eggs into the FREY basket. That said, the company does enjoy a well-capitalized balance sheet.
In addition, Wall Street analysts love FREY stock, pegging it a consensus strong buy. Also, their average price target implies an upside potential of over 108%. Therefore, it’s one of the best battery stocks to buy for gamblers.
Headquartered in Stafford, Texas, Microvast (NASDAQ:MVST) generated plenty of intrigue when it made its public market debut in 2021. Actually, it made its debut in 2019. However, Microvast ended up merging with a special purpose acquisition company in 2021 while the SPAC itself debuted in 2019. Unfortunately, MVST succumbed to the usual performance of SPACs post-merger, which is to say it veritably cratered.
In the trailing year, shares gave up more than 75% of equity value. That’s not going to inspire much confidence. As well, its financials could use plenty of work. About the only resounding positive is that the market prices MVST at 0.87-times book value, which is extremely undervalued.
Still, as the global EV rollout gets underway in earnest, Microvast’s specialty in EV batteries could boost the enterprise. In addition, the company also focuses on energy storage systems, which may gain relevance on grid insecurity. As a parting note, MVST enjoys a sole consensus analyst view of buying. Here’s the thing: with a price target of $8, this represents an upside of 360%. That makes it one of the best battery stocks to buy for speculators.
On the date of publication, Josh Enomoto did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
A former senior business analyst for Sony Electronics, Josh Enomoto has helped broker major contracts with Fortune Global 500 companies. Over the past several years, he has delivered unique, critical insights for the investment markets, as well as various other industries including legal, construction management, and healthcare.
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