The domino effect applies to Wall street, too. Shares of Plug Power (PLUG) trended down on Wednesday along with its brethren in the renewable energy segment, seemingly after Tesla’s Battery Day failed to deliver the goods. Nevertheless, it is a minor setback in what has been a breakout year for the fuel cell pioneer. Shares are up by a magnificent 286% so far, driven by outstanding earnings beats and investors’ insatiable hunger for alternative energy stocks.
However, the drop just goes to show how correlated stock market moves can be. As in tandem with the tilt to the downside, the company actually had some good news yesterday.
Plug Power announced a partnership with fuel logistics company Universal Hydrogen. The two will collaborate on building a propulsion system to power commercial aircrafts with hydrogen fuel cells. The end game is to certify and send to the skies the world’s first 2MW hydrogen-electric aircraft powertrain.
More details should become apparent today, when Plug Power hosts a symposium in which it is expected to shine a light on other fuel cell applications beyond the company's core forklifts business.
For H.C. Wainwright analyst Amit Dayal it is further confirmation of the opportunity the changing energy landscape presents. Dayal expects PLUG to make good use of the rising industry and projects revenues will rise from $287.7 million in 2020 to $2.6 billion in 2028 at an eight-year CAGR of 31.8%.
Looking ahead to today’s event, the 5-star analyst said, “As we had highlighted previously, Plug is taking initial steps to leverage its technology to enter new markets. These initiatives should be viewed with a longer-term lens, and not be expected to offer any material near-term revenue contribution, but these are indicative of potentially strong future growth opportunities as numerous industries look for clean energy options. We believe the company, during its Symposium, will also be providing more clarity on cost down initiatives to make fuel cells and green hydrogen more price competitive in the market.”
To this end, Dayal reiterated a Buy on PLUG shares along with a $14 price target. There’s room for a 16% uptick from current levels. (To watch Dayal’s track record, click here)
There’s similar positive sentiment amongst Dayal’s colleagues. PLUG's Strong Buy consensus rating is based on 9 buys and 2 Holds. However, following the year’s outsized gains, the $12.20 average price target suggests shares will remain range bound for the foreseeable future. (See PLUG stock analysis on TipRanks)
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