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Bloom Energy is positioned for “robust growth” as demand for fuel cells remains strong, according to RBC Capital Markets. Analyst Chris Dendrinos initiated coverage of the electric and hydrogen power company with an outperform rating. His price target of $24 implies shares soaring 54.3% from Thursday’s close. Shares were up more than 2% Friday before the bell. “Our outlook is underpinned by our belief that emissions regulation and social pressures to decarbonize will remain a tailwind for adoption, and that customers will continue to favor BE’s value proposition,” Denidros wrote in a Thursday note. “We believe the growth and positive financial outlook are underappreciated at the current share price and warrant a premium to peers given the more favorable positioning,” he added. Denidros thinks Bloom Energy is moving past its headwinds of Covid, inflation and elevated natural gas prices, which he said presented an overhang on the company’s valuation over the last few years. The company’s increasing traction in Europe, improving cost structure and lower natural gas prices are helping its growth and profitability prospects, he added. “Our analysis shows that BE’s vertical sales approach is unlocking incremental value and that there continues to be a strong opportunity to grow the customer base,” said Denidros. “Bloom has demonstrated its customers tend to take a more holistic approach to valuing its services and are willing to pay for the incremental value, which the company attributes to its offerings’ reliability, flexibility, sustainability, and short time-to-power,” he continued. He highlighted the company’s “solid traction” with its customer base in the data center, telecom and health care sectors. The stock has declined by more than 18% year to date. Shares have also fallen over by more than 15% over the past 12 months. —CNBC’s Michael Bloom contributed to this report.
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