READING, Pa. – EnerSys (NYSE:ENS), a prominent provider of industrial energy storage solutions with a market capitalization of $3.93 billion and annual revenue of $3.51 billion, has finalized a $199 million award from the U.S. Department of Energy to support the construction of a new lithium-ion battery manufacturing facility in Greenville, South Carolina. According to InvestingPro analysis, the company maintains strong financial health with liquid assets exceeding short-term obligations. The funding comes from the DOE’s Office of Manufacturing and Energy Supply Chains and marks a significant step in bolstering the U.S. energy supply chain.
The planned Greenville facility will encompass 500,000 square feet and is designed to produce advanced lithium-ion cells for a range of critical applications, including commercial, industrial, and defense sectors. Notably, the factory will cater to the specific needs of the U.S. Department of Defense for domestically sourced batteries. The company's solid financial foundation, evidenced by a healthy current ratio of 2.97 and moderate debt levels, positions it well for this expansion.
EnerSys aims to start construction in 2025, with commercial production projected to begin in 2028. This development follows the company's announcement on September 20, 2024, regarding its selection for the DOE award negotiation, and subsequent details provided in a Technology Talk webcast on September 30, 2024.
The new facility is expected to advance EnerSys's ambitions in shaping the future of energy storage and underscores the company's commitment to sustainability and minimizing its environmental footprint. The investment also aligns with EnerSys's broader portfolio, which includes power conversion, distribution, storage, and a variety of batteries for different industrial applications.
The press release contained forward-looking statements regarding the expected outcomes of the investment, including job creation, investment completion, and the operational timeline of the gigafactory. EnerSys has emphasized that these statements are based on current expectations and are subject to risks and uncertainties that could affect future results.
This news is based on a press release statement, and as the company prepares for the construction phase, the industry will be watching closely to see how this investment impacts EnerSys's market position and the broader landscape of U.S. energy storage solutions.
In other recent news, EnerSys showcased a steady Q2 performance, aligning with its guidance, and announced a leadership transition with CEO David Shaffer set to retire in May 2025. Shawn O'Connell, presently the President of Energy Systems Global, is poised to take over as CEO. The company reported an improved Q2 adjusted gross margin of 28.7%, a 210 basis point increase year-over-year, and met the provided guidance for revenue and earnings per share. Noteworthy developments include a $200 million Department of Energy award secured for lithium giga factory development and a 30% increase in energy systems orders year-over-year.
In parallel, Oppenheimer analysts have upgraded EnerSys stock from Perform to Outperform, setting a new price target of $115.00. The upgrade reflects a positive outlook on several factors influencing the company's performance, including an improving telecom capital expenditure forecast and clarity regarding the upcoming management transition. Oppenheimer analysts anticipate EnerSys to surpass earnings per share expectations for the December quarter and project upward revisions for fiscal years 2025-2026.
These recent developments underscore a belief in EnerSys's ability to navigate through challenges and capitalize on growth opportunities in the coming years. The analysts at Oppenheimer express confidence in the company's core growth strategies, which are expected to drive the company's growth and outperformance of its shares through 2025.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.