The Inflation Reduction Act, recent share underperformance and an attractive valuation all make Wallbox a buy, Bank of America said Thursday. Analyst Alexander Virgo upgraded the Barcelona-based maker of home electric vehicle chargers to buy from neutral. The analyst did trim his price target on the stock to $10 per share from $11.30. However, that new target still implies upside of 93% from Wednesday’s close. “With the passing of the Inflation Reduction Act in the US, Wallbox is now well positioned to benefit from the US charging infrastructure expansion,” Virgo wrote. “We think the US will be the key growth driver in the near term, forecasting a group org sales growth of c114% YoY with North America up c640% in 2022. This high growth expectation compared to the US EVs sales growth (22% in 2022) is justified given Wallbox’s position in the US charging market and the accelerated ramp up in charging infrastructure,” he added. Earlier this year, President Joe Biden signed the Inflation Reduction Act. The legislation includes billions of dollars in tax credits for manufacturing clean energy products such as electric vehicles, along with tax credits for individuals who buy EVs. This makes Wallbox’s products potentially attractive to more consumers, as the company seems to be one the very few producing direct current chargers of more than 350kW in the U.S., Virgo said. Wallbox shares have struggled in 2022 alongside other names in the EV space, falling 66%. However, this massive drop has created a buying opportunity, making the stock’s valuation attractive, the analyst said. Virgo said Wallbox is lagging its EV charging peers by more than 10%, adding that the stock trades at an enterprise value-to-sales multiple of 1.4. That’s below OEM peers of about 1.7. Wallbox traded more than 4% higher Thursday.
