Bank of America has doubled its buy rating for electric vehicle charging company Wallbox and expects its shares to rise more than 60% to $5.5 per share over the next 12 months. The Barcelona-based company manufactures home electric vehicle chargers and public charging systems for the North American and European markets. However, the investment bank’s analysts’ bullish outlook comes with a downward revision to its price target of $8 per share. The stock trades on the New York Stock Exchange and has declined 70% over the past year. It was trading at $3.40 a share at Monday’s close. According to bank analysts, the biggest drag on the stock’s underperformance has been high inventory levels with distributors of the company’s products. The company’s management has addressed the issue and stated that stock levels are expected to normalize in the second half of the year. WBX 5Y Line Analysts at Bank of America also point to other green shoots for the company. Bank of America equity analyst Marianne Bulot said Wallbox had expanded its profit margin by 90 basis points in the first quarter of this year, despite a challenging business environment. “We think gross margin could see a further jump by the end of 2023 … with an acceleration in sales of new products and better production cost management,” she said in a research note to clients on May 5. The company delivered 45,000 charging units in the first quarter of this. year, compared to 48,000 in the fourth quarter of last year. Despite the decline in quarterly figures, the company reported 24% annual revenue growth. Wallbox has also historically outperformed its peers, growing 100% in 2022 compared to 23% for the entire market. While growth has slowed this year, the problem is not unique to Wallbox, according to the investment bank. For example, the bank said the slow adoption of electric cars amid supply chain disruptions has slowed growth. Bulot also expects the company’s fundamentals to be in better shape in the second half with the release of its new 150-kilowatt and 180-kilowatt superchargers. Bank of America estimates that Wallbox has begun manufacturing these units and will benefit from US subsidies in the Inflation Reduction Act. “We see outperformance versus the market, and in particular the US position should drive the 75% [per annum] revenue growth to 2025,” said Bulot. “Wallbox is one of the few manufacturers planning US production capacity for 350kW+ chargers to meet larger US political ambitions for a national fast charging network. our purchase [rating] Growth and gross margin are above peers and separately based on US market conditions.”
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