EV play Blink Charging is up more than 50% this quarter. Cowen says take some profits

Published Mon, Nov 22 20218:26 AM ESTUpdated Mon, Nov 22 20218:58 AM EST

Shares of electric-vehicle charging company Blink Charging have surged more than 50% in the fourth quarter amid investor optimism around the space, but Cowen says it's time to lock in gains. The firm on Monday cut the stock to a market perform rating from outperform following the "euphoric run across EV charging stocks." Analysts led by Gabe Daoud said Blink's valuation looks stretched relative to peers, and the firm prefers competitors ChargePoint Holdings and EVgo. Part of the recent run for EV stocks is due to a government infrastructure package that earmarks billions of dollars for a national network of EV chargers. The Build Back Better plan, a separate bill that passed the House but is expected to face opposition in the Senate, also includes additional incentives aimed at spurring EV buildout. The funding comes after Biden signed an executive order in August calling for 50% of new car sales to be electric by 2030. "BLNK remains well-placed to benefit from industry tailwinds, but relative to our model which underwrites significant growth, and peer multiples, plenty appears priced in," Cowen said. The firm cut its target on the stock by $1 per share to $40 per share. The new target is 7% below where shares closed Friday. The Florida-based company uses several different business models, including property agreements, partnerships and outright sales. The firm said this allows the company to gain exposure to a $12 billion total addressable market that combines hardware sales and charging revenues. "We see the company inflecting to FCF positive in 2027, helped by increasing gross margins towards 40% as utilization begins to improve towards 15% and higher margin charging revenues begin to scale," the firm said. "Managing the upfront capital investment required to deploy company owned stations will be key as this nascent industry takes off," Cowen added. Shares of Blink Charging slid 1.5% during premarket trading Monday. — CNBC's Michael Bloom contributed to this report.

Ben Hasty | MediaNews Group/Reading Eagle via Getty Images

Shares of electric-vehicle charging company Blink Charging have surged more than 50% in the fourth quarter amid investor optimism around the space, but Cowen says it's time to lock in gains.

The firm on Monday cut the stock to a market perform rating from outperform following the "euphoric run across EV charging stocks."