While markets are dipping lower to start the week, shares of Enovix (ENVX 8.66%) are jumping considerably higher. The lithium-ion battery manufacturer received some favorable coverage from an analyst this morning, and the market is taking note.
As of 10:18 a.m. ET on Monday, shares of Enovix are up 9.3%, having retreated from their earlier climb of 14.2%.
Ananda Baruah, an analyst at Loop Capital, lifted the price target on Enovix’s stock to $100 from $50, providing an extremely bullish opinion on how much room the stock has to run. Based on where shares opened today, the new price target implies upside of 415%. According to Thefly.com, Baruah predicated the price target hike on the strength of its battery partnerships with industry leaders like Apple, Samsung, and Meta Platforms.
Juxtaposed with the opinions of other analysts, Baruah’s price target stands out even more. Earlier this month, after the company reported its second-quarter 2022 earnings, Gus Richard, an analyst at Northland, raised his price target to $25 from $22, while Craig-Hallum analyst Anthony Stoss lifted his price target to $25 from $20.
It’s no wonder that shares of Enovix are soaring today, considering Loop Capital’s extremely bullish outlook. But investors should pause before charging their portfolios with the lithium battery developer.
Baruah’s price target is simply an individual belief on how high shares can rise; in fact, it’s an outlier among other analysts’ opinions. Instead of blindly following one bullish analyst, investors should monitor the company’s progress in the coming months with regard to its targets: ramping up production at its Fab-1 factory and growing revenue.
Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to Meta Platforms CEO Mark Zuckerberg, is a member of The Motley Fool’s board of directors. Scott Levine has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Apple and Meta Platforms, Inc. The Motley Fool recommends the following options: long March 2023 $120 calls on Apple and short March 2023 $130 calls on Apple. The Motley Fool has a disclosure policy.