battery manufacturer Freyr Battery SA FREY aims to become a major player in the gigafactory industry.

So much so that shares of Freyr jumped almost 6% during Friday’s premarket session after analysts at Bank of America Global Research began coverage of the stock.

The BofA Analyst: The investment bank equity analyst Julien Dumoulin Smith initiated Freyr with a buy rating and a price target of $13.

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Dumoulin-Smith said in a purchase note to investors Friday that Freyr expects to convert the committed offtake into bankable offtake, which could then lead to project financing. This could lead to Freyr turning his giga-scale aspirations into reality.

The company has already secured an approved project for 29 GWh in Norway and a planned 34 GWh (and eventually 50 GWh) in the US

Freyr’s cell design, developed at MIT, is optimized for the stationary storage market, which will grow strongly in the coming years. This could be an important catalyst for the stock.

Freyr is the company closest to European competitor Northvolt, noted Dumoulin-Smith, which has grown from an idea in 2017 to a $12 billion valuation in 2022. The company has a committed contract for 38 GWh and over 100 GWh of contingent offtake, representing over $14 billion in booked and potential orders.

Freyr’s management team has been active since its PIPE offering in 2021 and holds a number of supply contingents for raw materials, equipment and inspection services. With two officially announced locations in Mo i Rana, Norway, and Coweta County, Georgia, the analyst said Freyr has laid the groundwork for success.

BofA said the company’s position and valuation make it an attractive proposition for investors looking to delve into the storage theme.

However, it’s important to note that the investment risk of sustained cash burn ahead of the sales turnaround is significant, so investors should consider the risk/reward tradeoff.

Price promotion: Shares of Freyr are traded…