Guggenheim downgrades Energy Vault to Neutral on battery storage ‘distraction’

As previously reported, Guggenheim analyst Joseph Osha downgraded Energy Vault (NRGV) to Neutral from Buy and removed its previous $7 price target on the shares. The firm believes the company may "struggle to make money" in lithium-ion battery energy storage and that the company’s efforts in that area are "a distraction" from its core gravity energy storage efforts. The firm believes that "the vast majority" of the company’s 2023 revenue is likely to come from its battery energy storage business, where it does not doubt that demand is "robust." However, based on companies including Stem (STEM), Fluence (FLNC), Ameresco (AMRC) and Chargepoint (CHPT) – all of which Guggenheim identifies as "experienced competitors in their industries" – having highlighted problems, the firm believes supply chains for batteries and power electronics remain tight and logistics constraints are creating challenges.