Ford Motor Co. shares surged Wednesday after a bullish call from Morgan Stanley on the automaker drew investor attention to the company’s energy storage business.
Shares climbed as much as 15% by 1:15 p.m. in New York, putting the stock on track for the 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 Detroit-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 $10 billion, 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.
According to Bloomberg Intelligence analyst Steve Man, expanding the energy segment is a “nice pivot to a higher margin business” for Ford.
Impact to Ford’s business aside, the potential that the company could count massive technology firms as customers also boosted trader sentiment.
“It does show how much anything having to do with hyperscalers right now is getting a lot attention from investors,” said Matt Maley, chief market strategist at Miller Tabak + Co.
