Westwater Resources Inc (NYSE-A:WWR) shareholders have “plenty to celebrate” after the company announced a letter of intent with a battery manufacturer to supply its proprietary purified micronized graphite (PMG) beginning in 2023, according to analysts at Crystal Equity Research.
The firm repeated its ‘Speculative Buy’ rating and price target of $20 on the stock.
Westwater’s NYSE American-listed shares are currently trading at about $1.40.
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In a note, analysts wrote that, despite the lack of details regarding the potential customer, the PMG supply agreement provided strong evidence of the commercial potential in Westwater’s graphite materials.
“Impeccable execution on its graphite materials processing plant near Kellyton, Alabama puts the company in a good position to begin commercial scale production of its proprietary graphite materials products in late 2023,” they wrote.
“Investors have plenty to celebrate in WWR: 1) on schedule construction of the graphite processing plant, 2) effective business pipeline successfully cultivating prospect relationships, 3) financing options for capital spending enhanced by potential for orders beginning in 2023.”
The analysts added that they continued to view WWR as undervalued relative to its graphite materials peers.
“A group of 16 graphite exploration and development companies trades at 5.69 times book value, while WWR trades at 0.49 times Westwater book value,” they wrote.
Westwater Resources is focused on developing battery-grade natural graphite. The company's primary project is the Kellyton graphite processing plant that is under construction in east-central Alabama.
Contact the author at emily.jarvie@proactiveinvestors.com
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