Stifel: Expecting an increase in battery demand, reiterates the "Buy" rating on Eos Energy (EOSE.US)

Stifel issued a research note, reiterating its "buy" rating on American zinc battery storage developer Eos Energy (EOSE.US) with a target price of $6, saying that the growth of renewable energy and the demand for battery storage to support the grid will drive the demand for the company's zinc-iron battery.

Stephen Gengaro-led Stifel analyst said that Eos Energy's backlog and opportunity pipeline "strong", with significant progress made in expanding its first automated production line and added that recent funding from Cerberus and a significant loan from the Energy Department largely mitigated the liquidity risk.

Stifel team took note of the company's $133m backlog, $586m backlog as of June 30 (up 10%) and $1.38bn (or 52GWh) commercial pipeline (up 40%) in the second quarter.

Gengaro and his team also noted that the company is ramping up its 2GWh automated production line in Turtle Creek, Pennsylvania, which equates to $400m-$500m annual revenue potential.