Hydrogen fuel cell company Plug Power is on pace for meaningful upside with several near-term catalysts ahead, according to JPMorgan. Analyst Bill Peterson added Plug Power to its positive catalyst watch list for the near-term in a Thursday note, in addition to reiterating its overweight rating on the stock. It also maintained its price target of $12 per share, implying shares could rally 59.1% from Wednesday’s close. The company’s recent investor meeting reaffirmed Peterson’s belief that “Plug’s positive long-term outlook remains intact despite short-term challenges, which the market has likely expected.” Plug Power lowered its 2023 revenue forecast to account for a disappointing third quarter, but Peterson said he had anticipated this would occur. Plug’s stock has underperformed due to several factors, including a risk-off environment and production delays and missed fuel margins, Peterson said. Shares have tumbled 40% year to date and more than 60% over the past 12 months. The stock pulled back an additional 1.3% as of midday Thursday. PLUG YTD mountain Plug Power shares “However, we think the company was prudent in revising its targets and providing appropriate disclosure around near-term challenges that will likely linger into next year before abating,” said Peterson. “Thus, the guidance revision could act as a clearing event ahead of multiple near-term catalysts.” Potential catalysts for the company and hydrogen sector are near, according to the analyst. On Friday, the Biden administration is expected to announce $7 billion in hydrogen hub grants, from which Peterson thinks Plug Power is well-positioned to benefit. The company’s Georgia plant production will also start and likely fulfill deliveries by the end of the year after a period of delays. Plug Power is could further see tailwinds from a positive resolution with the U.S. Treasury on the Inflation Reduction Act’s clean hydrogen production tax credits. The company is also in process of securing a loan between $1 billion and $1.5 billion from the Department of Energy, which would support new hydrogen plants. “We expect PLUG to inflect into meaningful profitability in 2024, but for the time being the stock trades in line with the renewables and xEV spaces,” said Peterson. —CNBC’s Michael Bloom contributed to this report.
