3 Battery Stocks That Could Be Multibaggers in the Making: April Edition


  • These are the multibagger battery stocks to buy, as they represent quality companies poised for sustained growth.
  • Panasonic Holdings (PCRFY): Aggressive EV battery capacity expansion plans coupled with investment in innovation make this a buy.
  • Solid Power (SLDP): SLDP has the backing of strong automotive partners, as the company moves towards commercialization of solid-state batteries.
  • Lithium Americas (LAC): Its Thacker Pass asset has an after-tax net present value of $5.7 billion and is a potential cash flow machine.
multibagger battery stocks - 3 Battery Stocks That Could Be Multibaggers in the Making: April Edition

Source: Sergii Chernov / Shutterstock.com

Battery stocks have been depressed in the last few quarters. That does not come as a surprise, with the electric vehicle (EV) industry facing macroeconomic headwinds. Further, overall EV adoption has been slower than expected. I, however, believe the long-term outlook for the industry remains positive. The correction presents a good opportunity to accumulate potential multibagger battery stocks.

In terms of growth potential, the EV battery market size was valued at $63.51 billion in 2023. The market size is expected to increase to $573.08 billion by 2033. That would imply a 9-fold growth in the next 10 years. Clearly, there is scope for massive wealth creation, and it’s a good time to accumulate quality battery stocks.

Specific to battery manufacturers, the focus should be on companies looking at capacity expansion coupled with innovation. This column focuses on three potential multibagger battery stocks to buy and hold until 2030.

Panasonic Holdings (PCRFY)

10 Lithium Stocks to Buy Despite the Market's Irrationality
Source: Shutterstock

Panasonic Holdings (OTCMKTS:PCRFY) stock has been subdued in the last 12 months. The reasons are macroeconomic headwinds and the slower-than-expected adoption of EVs. However, it’s a potential multibagger battery stock to buy and trades at a deep valuation gap. Currently, PCRFY stock trades at a forward price-earnings ratio of 7.3.

One reason to like Panasonic is its aggressive growth plans. As compared to last financial year’s battery capacity, the company plans to quadruple capacity to 200 GWh by 2031. That will imply steady revenue and EBITDA growth in the coming years. Panasonic has also guided for EBITDA margin expansion during this period.

At the same time, Panasonic is investing in innovation. That will ensure the company maintains or gains market share by the end of the decade. In December 2023, Panasonic partnered with Sila Nanotechnologies to “purchase next-generation nano-composite silicon anode material for EV lithium-ion batteries.”

That will help in achieving a 25% increase in battery energy density by 2031. Further, battery performance will likely increase significantly. Aggressive capacity expansion and innovation are a perfect combination for growth and value creation.

Solid Power (SLDP)

Smartphone with logo of American battery company Solid Power Inc. on screen in front of business website. Focus on center-left of phone display.
Source: T. Schneider / Shutterstock.com

Among the companies working towards the commercialization of solid-state batteries, Solid Power (NASDAQ:SLDP) looks attractive. SLDP stock had traded at highs of $15 in November 2021. The decline from those levels has been sustained, with the stock at $1.64. I, however, believe that the downside is capped at current levels. Further, with positive business developments, the upside potential is significant.

In terms of business progress, Solid Power achieved an electrolyte production capability of 1.1 million metric tons annually. Further, A-1 sample cells were delivered to automotive customers for validation testing.

The strengthening of its partnership agreement with SK On will ensure the company makes inroads in the Korean markets. SK On will use Solid Power’s cell technology for research and development and to solid-state produce batteries in Korea.

With a focus on producing safer and high-performance cells, Solid Power has been working on A-2 sample cells in 2024. Positive news from automotive companies after validation testing can be a major upside catalyst for SLDP stock.

Lithium Americas (LAC)

smartphone with logo of Canadian company Lithium Americas Corp on screen
Source: Wirestock Creators / Shutterstock.com

McKinsey estimates that the entire lithium-ion battery chain will grow at a CAGR of 30% between 2022 and 2030. That would imply strong demand for lithium, and the long-term outlook indicates an acute supply gap. The big correction in lithium is, therefore, a good opportunity to accumulate quality stocks.

Lithium Americas (NYSE:LAC) is an attractive name to consider for multibagger returns. The lithium miner looks undervalued, and the company’s asset will likely be a cash flow machine after 2027.

To put things into perspective, the Thacker Pass asset has a mine life of 40 years. Further, the asset has an after-tax net present value of $5.7 billion. Once both phases of the asset commence production, the average annual EBITDA is expected at $2 billion.

It’s worth noting that Lithium Americas received a commitment for a $2.26 billion loan from the U.S. Department of Energy. Additionally, the recent equity offering of $275 million ensures that financing is secured for construction at the Thacker Pass asset. Once lithium starts trending higher, I expect LAC stock to surge.

On the date of publication, Faisal Humayun did not hold (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.

Faisal Humayun is a senior research analyst with 12 years of industry experience in the field of credit research, equity research and financial modeling. Faisal has authored over 1,500 stock specific articles with focus on the technology, energy and commodities sector.

Article printed from InvestorPlace Media, https://investorplace.com/2024/04/3-battery-stocks-that-could-be-multibaggers-in-the-making-april-edition/.

©2024 InvestorPlace Media, LLC