LG Energy Solution's Shares Track Tesla's Rally
22 Marzo 2023 - 09:19AM
Dow Jones News
By Kwanwoo Jun
LG Energy Solution Ltd.'s shares climbed Wednesday, tracking the
overnight rally in U.S. electric-vehicle making giant Tesla Inc.
after a credit-rating upgrade.
Shares of the South Korean EV battery maker closed 5.0% higher
at 573,000 won ($439.47) to notch the sharpest daily percentage
gain in almost two months, though paring some gains earlier in the
session. The stock outperformed the broader benchmark Kospi's 1.2%
gain for the day.
The rally in shares of LG Energy Solution, which supplies EV
batteries to Tesla, tracked the U.S. auto giant, whose shares
surged 7.8% on Nasdaq Tuesday, the sharpest daily percentage gain
since Jan. 27, according to FactSet.
Tesla advanced after Moody's Investors Service on Monday lifted
its long-term issuer rating on Tesla's debt to Baa3. "The rating
action reflects expectation that Tesla will remain one of the
foremost manufacturers of battery electric vehicles with an
expanding global presence and very high profitability," Moody's
said in a statement.
Moody's said it expects Tesla to deliver about 1.8 million
vehicles globally in 2023, up 34% from 2022.
Goldman Sachs said in a research note Wednesday that it expects
LG Energy Solution and other South Korean battery makers to raise
their combined U.S. market share sharply to 57% by 2025, compared
with 11% in 2021. It points out that LG Energy Solution's U.S.
projects account for 70% of the company's current backlog
South Korean companies are rapidly expanding battery-production
capacity in the U.S. after years of localizing the supply chain
there to benefit from the Inflation Reduction Act that supports
local manufacturers against Chinese exports, the U.S. investment
bank said.
Goldman Sachs said it maintains its neutral rating and target
price of KRW540,000 for LG Energy Solution.
Write to Kwanwoo Jun at kwanwoo.jun@wsj.com
(END) Dow Jones Newswires
March 22, 2023 04:04 ET (08:04 GMT)
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