It has been a tough day of trade for the Novonix Ltd (ASX: NVX) share price on Thursday.
At one stage today, the battery technology company’s shares were down as much as 8% to $3.61.
The Novonix share price has recovered slightly since then, but currently remains down 6.5% at $3.68.
Why is the Novonix share price sinking?
The weakness in the Novonix share price on Thursday has been driven by a broad market selloff.
This follows a very poor night on Wall Street, which saw the Dow Jones index have its worst session since 2020.
The declines have been felt particularly hard the further up the risk curve you go. And with Novonix sporting a $2 billion market capitalisation despite recently reporting quarterly revenue of US$2.1 million, it’s about as high risk as it gets for investors.
Is this a buying opportunity?
While the team at Morgans currently has a hold rating on the company’s shares, its price target of $4.88 implies major upside potential for the Novonix share price.
Though, it is worth highlighting that this broker note was from February and a lot has changed in respect to valuations since then.
In light of this, it may not be wise to assume that this price target will remain the same the next time the broker looks at the company.