Phillips 66, the major US refiner is buying around 78m of new shares at in Novonix at circa $2.63 based on current spot exchange rates. The cash will help fund an increase in Novonix Anode Materials’ (NAM) production capacity as per the company’s three step growth plan.
Petroleum coke supplied by oil refineries is one of the key inputs for NAM. Morgans believes a supply agreement is likely which de-risks the company’s growth plans lifts its target price to $4.53 from $3.34, while retaing a Speculative Buy.
Novonix is an early stage company set to capture rapidly growing demand for battery materials and technology, according to the analyst. It is considered particularly well positioned in the US market to establish a domestic supply chain.
Sector: Materials.
Target price is $4.53.Current Price is $3.49. Difference: $1.04 – (brackets indicate current price is over target). If NVX meets the Morgans target it will return approximately 23% (excluding dividends, fees and charges – negative figures indicate an expected loss).
