Hydrogen power company Plug Power Inc. (NASDAQ: PLUG) is both a first-time mover and a fast-paced mover in the hydrogen fuel cell space. But the stock is trading at a “steep” price, according to JPMorgan.
Power Plug Analyst: Paul Coster starts Plug Power coverage with a neutral rating and a $ 60 target price.
Thesis Plug Power: Plug Power was the first player in the $ 200 billion shipping and logistics market, Coster said in an early note on Thursday.
The company is able to back up years of operations with proven proton exchange membrane technology, a strong balance sheet, and big customers and partners.
This gives the company an interesting path to make $ 1.2 billion in sales by 2024 and make a profit, he said.
In fact, Plug Power’s recent partnership with SK Group and Renault could increase sales in 2024 to $ 1.7 billion, and revenue growth will continue to accelerate in 2025, Coster said.
But JPMorgan’s $ 60 price target follows a 60-fold discounted EV / 2025 EBITDA estimate of $ 534 million.
“Welcome to investing in hydrogen fuel cells,” said the analyst.
Related link: Why can hydrogen space fuel cell leaders create ‘Bigger winner’.
Why is JPMorgan downgrading FuelCell: Coster downgraded separately. FuelCell Energy Inc’s (NASDAQ: FCEL) stock ratings from Neutral to Underweight.
The shares are up 70 percent since the start of 2021 and more than 800 percent last year, analysts said, the shares were trading at around 50 times / forward and “Great value” compared to stocks in the same group.
“At this point, we expect the stock to perform well below our coverage averages for the next 6-12 months, although we remain constructive about the Alt Energy group in general.”
PLUG, FCEL Price Action: Plug Power shares lost 4.26 percent in Thursday’s session to close at $ 66.54, while FuelCell Energy was down 8.05 percent to $ 17.60.
Courtesy of Plug Power
Latest scores for FCEL
|A date||company||Action movie||from||To|
|Jan 2021||J.P. Morgan||Downgrade||neutral||Less weight|
|Jan 2021||Jefferies||Start covering||hold|
|Dec 2020||Canaccord Genuity||Start covering||hold|
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