NEW YORK (TheStreet) -- Shares of Polypore (PPO) are climbing after an analyst upgraded the stock and predicted that the company would probably partner with Tesla (TSLA) - Get Tesla Inc Report. Polypore develops membranes for lithium batteries.

WHAT'S NEW: Polypore is likely to team up with Tesla to manufacture membranes for the electric car maker's "gigafactory" battery plant, William Blair analyst Brian Drab wrote in a note to investors earlier today. After speaking with several industry sources, Drab stated that Polypore is the front-runner to supply Tesla with membranes, which would be used as separators for the electric car maker's batteries. Also contributing to the analyst's view that Tesla will choose Polypore are the low cost of Polypore's separators, its positive reputation, and its status as the only lithium battery separator in the U.S., where Tesla's factory will be located. Although it's difficult to estimate the revenue that Polypore would obtain from such a deal, Tesla could account for half of Polypore's revenue by 2020, the analyst estimated. Drab upgraded his rating on Polypore's stock to Outperform from Market Perform.

WHAT'S NOTABLE: On May 9, DA Davidson upgraded Polypore to Buy from Neutral, saying that the stock is unlikely to drop significantly, while the company could benefit over the long-term from the proliferation of electric vehicles. The firm raised its price target on the shares to $42 from $36.

PRICE ACTION: In mid-morning trading, Polypore jumped $1.34, or 3.2%, to $42.89.

TheStreet Recommends

 Reporting by Larry Ramer.

The Fly

provides comprehensive coverage of stock news and Street research and delivers it in real-time. The Fly breaks market-moving news and explains sudden stock movements in a rapid-fire, short-form story format. Follow @theflynews on Twitter. For a free trial, click