NEW YORK: Ford Motor Co stock surged after Morgan Stanley issued a bullish call that the automaker’s energy storage business could soon make a deal with hyperscalers.
Shares climbed 13%, cementing the stock’s biggest one-day gain since March 2020, and helping it turn positive for the year.
“We believe that there is a fairly high likelihood that Ford signs an Energy Storage System supply agreement with large commercial customers, and potentially hyperscalers, over the next few months,” Morgan Stanley analyst Andrew Percoco said.
The Dearborn, Michigan-based company’s deal with Chinese battery technology behemoth Contemporary Amperex Technology Co Ltd, or CATL, is an “underappreciated strategic competitive advantage for its energy storage business,” the analyst wrote in a note to clients published late on Tuesday.
Percoco estimated that Ford Energy could be worth US$10bil, and also sees opportunity for the valuation to approach that of Tesla’s energy business as the company executes the capacity expansion plans and starts to build a firm order backlog.
Ford is investing US$1.5bil this year to get into the energy storage business, which chief financial officer Sherry House described on an April 29 earnings call with analysts as a “high return growth opportunity.”
The automaker is converting a Kentucky factory for batteries into a facility that builds large storage cells for data centres and utilities. — Bloomberg
