Batteries: Goldman Sets Buy On ENS; Neutral On HEV, AONE

Goldman Sachs, which this morning stated coverage of the solar sector, also launched coverage on a trio of electric vehicle battery plays.

Analyst Mark Wienkes has a Neutral view on the group as a whole. “We find more realistic growth expectations have reconciled with valuation multiples to reflect what we expect will be a multi-year waiting period prior to clarity on plug-in hybrid and elecric vehicle mainstream market adoption,” he writes.

Here’s a look at his stock calls on the group:

• Enersys (ENS): He contends the company, which makes lead-acid batteries, is a “solid but under-followed and under-appreciated performer,” and starts the stock with a Buy rating and $29 target price.
• He is more cautious on both Ener1 (HEV) and A123 (AONE), rating both lithium ion battery companies as Neutral. “We see promise for vehicle electrification, but would maintain a cautious attitude until commercial roll-outs of plug-in vehicles commence…providing better visibility on which battery-OEM alliances can deliver vehicles that can cost-effectively penetrate the market,” he writes.

In today’s trading:

• ENS is down 22 cents, or 1%, to $22.34.
• HEV is down 17 cents, or 4.4%, to $3.71.
• AONE is down 18 cents, or 1.9%, to $9.49.