Morgan Stanley raised its price target for CATL from RMB 184 to RMB 210. The investment bank changed its HOLD rating for CATL to BUY. Morgan Stanley forecasted that the Chinese battery supplier will return to solid profit growth later in 2024.
According to Caixin, Morgan Stanley analysts raised CATL’s price target, stating that “a brutal competitive battle in battery prices will end in 2024, which could weigh on its profit in the first quarter but result in a strong recovery later on.” The China-based battery supplier’s shares surged by 14.5% to RMB 180.85 after Morgan Stanley lifted its rating to BUY.
CATL has a lot of projects lined up for 2024. In January, the battery supplier announced plans for its first plant in Beijing. CATL’s first Beijing battery plant will supply cells to Li Auto and Xiaomi Auto. The Chinese automaker appears to be strengthening its position in China by working with other prominent companies domestically. Recently, Chinese state-owned automaker BAIC announced a joint venture with CATL and Xiaomi Auto to build an intelligent battery cell manufacturing facility.
The Chinese automaker isn’t just focused on China, though. It also seems to be working on its presence in North America. CATL is reportedly working with Tesla to develop and validate M3P batteries. CATL and Tesla are long-time partners. In February, CATL allegedly restructured its shareholdings for Inflation Reduction Act (IRA) eligibility.
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