Electric-vehicle (EV) charging company EVgo (EVGO -3.23%) received some timely analyst support this morning. An upgrade on the stock to a buy recommendation had shares moving higher in premarket trading Thursday.
However, the timely recommendation from J.P. Morgan analyst Bill Peterson was overshadowed by news from the company itself. The combination had shares soaring as much as 49% in early trading. As of 10:55 a.m. ET, EVgo stock was still up by 47.3%.
Over $1 billion in financing
Peterson sees a huge business opportunity in EV charging for some participating companies. He thinks a key component to success is the owner-operator structure in which EVgo operates.
The company owns and operates over 1,000 fast-charging locations in 35 U.S. states. Other charging companies supply hardware and software for third parties to operate charging locations. That model is why he put a $7 target price on the stock, which implies a 78% upside from yesterday's closing price.
The stock has gained half of that upside this morning when, right on cue with Peterson's report, EVgo announced it received a committment from the U.S. Department of Energy (DOE) for a $1.05 billion loan to accelerate the buildout of the nation's EV charging network.
Even with the pervasive Tesla Supercharger network, many consumers remain wary of buying electric cars, due to charging uncertainty and concerns. The Biden administration has sought to improve the nation's charging infrastructure.
The new, low-cost financing from the DOE will help EVgo build about 7,500 new fast-charging stations. EVgo CEO Badar Khan stated, "This historic investment would meaningfully accelerate our network expansion to provide public charging to EV drivers across the United States."
Between the optimism from an analyst and major financing news to help grow its network, EVgo is gaining huge interest from investors today.
