Shares of FuelCell (FCEL) are under pressure on Thursday after JPMorgan analyst Paul Coster downgraded the stock to Underweight on valuation. The analyst pointed out that hydrogen pure-play stocks have outperformed the S&P 500 "massively," year-over-year and in 2021 year-to-date. Coster also started coverage of Plug Power (PLUG) with a Neutral rating.
SELL FUELCELL: Noting that hydrogen pure-play stocks have outperformed the S&P 500 "massively," year-over-year and in 2021 year-to-date, JPMorgan analyst Paul Coster downgraded FuelCell Energy to Underweight from Neutral with an unchanged price target of $10. FuelCell's solid oxide fuel cell solutions could take even longer to commercialize, but the company also has a "strong backlog" and strengthened balance sheet with which to execute on the current portfolio of SureSource solutions, Coster told investors in a research note. The analyst, however, thinks the stock is "richly valued here," citing valuation for the downgrade to Underweight.
ON THE SIDELINES: JPMorgan's Coster initiated coverage of Plug Power with a Neutral rating and $60 price target. The analyst views the company as "best in class" of the hydrogen/fuel cell space at present, but believes its "valuation is a challenge." Nonetheless, Coster pointed out that leveraging first-mover scale in PEM technology, the pace at which Plug Power is mobilizing is "breathtaking." The recent partnerships with SK Group and Renault (RNSDF) substantiate the company's opportunities in Europe and APAC and give him confidence in the 2024 targets of $1.2B sales, $250M in adjusted EBITDA, the analyst contended.
WHAT'S NOTABLE: Coster has an Overweight rating on Nikola (NKLA) with a $35 price target on the shares. The analyst believes Nikola "cleaned house" before year-end, making him believe that the news flow should turn positive in 2021, starting with commissioning of the first batches of Tre BEV trucks, transitioning to build-out of the FCEV factory, customer orders for the BEV, and the first FCEV prototypes.
PRICE ACTION: In late morning trading, shares of FuelCell have dropped almost 11% to $17.10, while Plug's stock has slid over 5% to $65.88.
FuelCell
-2.21 (-11.55%)
Plug Power
-3.77 (-5.43%)
Nikola
+0.54 (+2.70%)
Renault
+ (+0.00%)