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Investment banks pick their top battery and EV stocks — and there’s 1 Goldman loves

Goldman Sachs loves one EV stock for its battery innovation – and it also makes the bank’s conviction list of top buy-rated stocks. While HSBC named its favorite companies in energy storage, which is one of its “top conviction” themes. Chinese electric vehicle (EV) firm BYD is buy-rated by Goldman for its innovation in batteries, which it described as “market-leading” in a research note published May 23. BYD, which is backed by Warren Buffett’s Berkshire Hathaway, is one of the biggest electric vehicle makers in China. “BYD leads in Chinese new energy vehicle (NEV) sales for its differentiated technologies (DM-i hybrid, blade battery) and competitive designs,” the bank’s analysts, led by Sharmini Chetwode, stated. It described the company’s research and development as leading “on an unparalleled scale,” and also likes its partnership with China’s state-owned automaker FAW. BYD’s H-shares are on Goldman’s conviction list of its top buy-rated companies. H-shares are traded on the Hong Kong Stock Exchange, meaning they are available to overseas investors. Goldman’s research note focused on firms’ supply chain resilience and noted that BYD has an “integrated model and widespread production base,” with five manufacturing sites in China. HSBC’s lithium picks Meanwhile, HSBC says energy storage solutions are expected to boom this decade. “The increasing use of renewables to decarbonise power generation, the growing penetration of electric vehicles over the next few decades and favourable movements in lithium-ion battery prices (fallen 81% over the last decade; declined 6% in 2021) are expected to lead to a sizable investment in the Energy Storage space and likely to result in a significant rise in Energy Storage installations,” the analysts wrote in a May 18 research note. Lithium is a key metal in battery production and stock prices have risen sharply over the past year as projections suggest demand is going to widely outstrip supply . HSBC screened for stocks within energy storage, noting that its selection has outperformed the FTSE All World index by 13% in the year to date. Energy storage is one of its two “top conviction” themes within climate change, the bank said; the other is bio energy, where energy is produced from biomass, or organic materials. Read more These EV battery stocks will dominate — despite the threat posed by Tesla, Bernstein says Stocks keep hitting new lows. Here’s how to protect your portfolio and generate some returns Meet the veteran growth investor who picks stocks like Warren Buffett HSBC’s stock picks include South Korean chemicals company LG Chem , which makes lithium-ion batteries. The firm developed GM ‘s Ultium EV battery platform in partnership with the U.S. automaker , which is aiming to become a leader in EVs. HSBC also chose Allkem , an Australian lithium producer, which aims to maintain 10% of global lithium production over the next decade, according to its website. It also included Samsung SDI in its screen. The company is a pick for investment firm Bernstein too for its investment into a solid-state battery production pilot — such batteries use solid electrolytes and can hold more energy than those with liquid electrolytes. “Energy storage has emerged as the best-placed climate theme on our radar methodology,” HSBC’s analysts stated. “While the long-term measures of investor sentiment trade at a discount relative to historical levels, there are also signs of improving consensus outlook towards the theme.” The bank’s other themes include renewable energy including wind and hydro power, which are “less attractive,” according to the bank. – CNBC’s Pippa Stevens contributed to this report.

Jin Lee | Bloomberg | Getty Images

Goldman Sachs loves one EV stock for its battery innovation – and it also makes the bank’s conviction list of top buy-rated stocks. While HSBC named its favorite companies in energy storage, which is one of its “top conviction” themes.

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