EVgo, a major player in the electric vehicle charging space, saw its stock soar an impressive 61% following a bullish call from J.P. Morgan. This dramatic rise highlights the growing interest and potential in the EV charging market, as reported by Barron’s.

J.P. Morgan’s Bullish Stance

J.P. Morgan analyst Bill Peterson upgraded EVgo shares from Hold to Buy, reinstating a $7 price target. The analyst sees a significant opportunity in electric-vehicle charging stocks, but emphasizes the importance of picking the right ones.

Peterson’s optimism isn’t based on EVgo’s recent $1.1 billion conditional loan commitment from the Energy Department. Instead, he’s bullish on the company’s business model.

“Over the next few years, we see core owner-operator players outperforming other charging peers,” he wrote.

EVgo’s Market Position

EVgo owns and operates a network of more than 1,000 fast-charging locations across over 35 states. This extensive infrastructure gives the company a strong foothold in the rapidly growing EV charging market.

The bullish call had an immediate impact, with EVgo stock closing at $6.32 a share on Thursday, marking a 60.8% increase. This surge was particularly notable given that the S&P 500 y Dow Jones Industrial Average fell 0.2% and 0.4% respectively on the same day.

Evgo Stock Surges 61% As J.p. Morgan Sees Opportunity In Ev Charging Sector

Challenges in the EV Market

Despite the positive outlook for EVgo, the broader EV market faces some headwinds. Peterson notes that slower EV sales growth in the U.S. could impact third-party spending on charging equipment. However, this situation might actually benefit EVgo by giving it a leg up on growth.

Consumer sentiment towards EVs has also shifted slightly.

“Consumer likeliness to purchase an EV has eroded over the last three years from 25% to 18%,” Peterson reported. “Around 70% of those surveyed cited battery range as a top concern, while 52% cited price, and 49% cited public-charging availability.”

Industry Comparison

While EVgo is riding high, not all charging stocks are performing equally. ChargePoint Holdings, which sells hardware and software for charging infrastructure, was downgraded by Peterson from Buy to Sell. Despite this, ChargePoint stock managed to gain 3.8% on Thursday, closing at $1.36 a share.

With the new Buy rating, 67% of analysts covering EVgo stock are bullish, according to FactSet. This compares favorably to the average Buy-rating ratio of about 55% for stocks in the S&P 500. The average analyst price target for EVgo stock is about $5.50.

EVXL’s Take

The surge in EVgo’s stock price underscores the growing importance of charging infrastructure in the EV ecosystem. As we’ve seen in recent articles about Tesla’s Supercharger network expansion and Ford’s adoption of Tesla’s charging standard, reliable and widespread charging options are crucial for widespread EV adoption. EVgo’s strong position in this market, coupled with its business model focusing on owning and operating charging stations, could give it a significant advantage as the EV market continues to evolve.

What are your thoughts on the future of EV charging infrastructure? Share your opinions in the comments below.

Photos courtesy of EVgo.