F Ford Motor Company

By Kwanwoo Jun

SK Innovation Co. shares extended their winning streak to a fourth session on Tuesday as investors continued to cheer the resumption of affiliate SK On Co.'s supply of battery cells to Ford Motor Co.

Shares of the South Korean energy company closed 5.2% higher at 176,800 won ($136.23), following a 4.5% gain Monday. The broader benchmark Kospi ended flat.

The stock's rally reflects a solid correction after a recent slump that was prompted by Ford halting production and shipments of its F-150 Lightning electric pickup truck over a potential issue with the battery cells supplied by SK On.

SK Innovation's shares have been gaining since Ford said Thursday last week that it will resume production of the F-150 on March 13 after weeks of suspension during which it looked into a battery issue that led to a vehicle fire. Ford hasn't elaborated on the cause of the fire nor on its investigation.

SK On had said a week earlier that it had already restarted output of the battery cells.

KB Securities analysts Wooje Chun and Chaehee Kang said in a research note Tuesday that they remain upbeat on SK Innovation's long-term profitability, citing an order backlog of more than KRW200 trillion.

SK Innovation could also gain more from the U.S. Inflation Reduction Act, which grants battery makers tax breaks and other benefits, than any of its Korean peers, the KB analysts said.

They kept a buy rating and KRW223,000 target price on the stock, which is up about 18% in the month to date.

Write to Kwanwoo Jun at kwanwoo.jun@wsj.com

(END) Dow Jones Newswires

March 07, 2023 02:47 ET (07:47 GMT)

Copyright (c) 2023 Dow Jones & Company, Inc.