Li-Cycle Holdings Corp’s first quarter results managed to impress investors and analysts alike.
Shares of the company climbed nearly 8% Wednesday afternoon to $4.84, and Wedbush analysts tagged the company with a repeat Buy rating plus an $8 price target.
The lithium-ion battery recycling firm “is expanding its spoke and hub network on a global level,” analysts said.“
The firm noted that Li-Cycle’s Rochester hub is expected to begin commissioning later this year, along with facilities in Germany and Norway. Those, along with a facility in France expected to come online in 2024, should contribute about 50,000 tons of battery manufacturing scrap processing per year.
Then there are the company’s partnerships with VinES for battery manufacturing and Glencore International to continue building out its network.
“We believe LICY remains ahead of the game while preparing for accelerated demand as the [total addressable market] continues to escalate,” analysts said “Importantly, LICY secured a $375 million conditional loan from the [Department of Energy], set to close mid-2023.”
That’s enough to assuage concerns over revenue, which came in at $3.6 million, below the Street’s $8.3 million estimate.
However, the firm attributed this to an “unfavorable non-cash fair market value metal pricing impact seen in the quarter.”
Although not what we wanted to see, it is still important to note that the LICY story is still in its early innings with many expansionary strategies ahead as well as metal pricing expected to stabilize in the near future,” the analysts added.
Contact Andrew Kessel at andrew.kessel@proactiveinvestors.com
Follow him on Twitter @andrew_kessel