MW EVgo got the attention of a major investment bank. There's plenty to like - along with 3 roadblocks.

By Claudia Assis

EVGo's stock has doubled in the last 12 months and is up 60% in the last three months

Electric-vehicle-charging company EVGo Inc. got a vote of confidence from analysts at Morgan Stanley on Tuesday, but it wasn't as enthusiastic a vote as investors might have hoped, for three key reasons.

Shares of EVGo $(EVGO)$ are down around 4% so far this year, having taken a hit earlier in the year over fears that the Trump administration wouldn't be as friendly as its predecessor to EV charging and EVs in general.

Some of those fears appear to be justified: The version of President Donald Trump's tax and spending megabill passed by the House of Representatives last month includes cuts to EV tax credits, which would be phased out as soon as the end of the year in some cases.

EVGo shares, however, have doubled in the last 12 months and have gained nearly 60% in the last three months, far outpacing the S&P 500 index SPX in both time frames.

Morgan Stanley analysts led by Andrew Percoco started covering the stock with the equivalent of a hold rating and a price target of $4, implying an upside of about 7% over Tuesday's share price.

They see three roadblocks for the company: policy risk, pressure from increased competition and valuation after that stock rally.

On the policy side, concerns remain about the EV subsidies that are now in limbo, along with the possibility that the Energy Department could repeal or limit its loans for clean-energy-related companies.

In the plus column, however, EVgo is "well positioned to benefit from relatively robust growth in EV penetration," thanks in part to the company's "strong partnerships" with carmakers such as General Motors Co. $(GM)$, retailers such as Target Corp. (TGT) and Amazon.com Inc.'s Whole Foods $(AMZN)$, and the ride-sharing fleets of Uber Technologies Inc. $(UBER)$ and Lyft Inc. $(LYFT)$, the Morgan Stanley analysts said.

"EVgo is a pure-play EV charging company positioned well in agrowing EV market," they said.

-Claudia Assis

This content was created by MarketWatch, which is operated by Dow Jones & Co. MarketWatch is published independently from Dow Jones Newswires and The Wall Street Journal.

(END) Dow Jones Newswires

June 03, 2025 12:31 ET (16:31 GMT)

Copyright (c) 2025 Dow Jones & Company, Inc.