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Plug Power Is a Winner, but Wait for a Better Entry Point, Says J.P. Morgan
Plug Energy (PLUG) shares have kicked off 2021 with a bang, rising almost 90% because the flip of the 12 months. The PLUG narrative is benefiting from favorable macro situations; A brand new U.S. administration intent on forwarding the case for clear power is performing as a powerful catalyst, driving constructive investor sentiment towards the inventory. Including to the excellent news, the corporate mentioned it has exceeded its 2020 gross billings goal, whereas it expects to beat its earlier 2021 estimates. The corporate beforehand guided for $450 million in billings in 2021, however now anticipates $475 million, a 5.5% improve. Additional forward, by 2024, PLUG is concentrating on $1.7 billion in gross sales, 40% above the earlier estimate. Add into the combination a current $1.5 billion funding in return for a ten% stake within the firm from South Korea’s SK Group, and a three way partnership with French automaker Renault to develop hydrogen-powered gentle industrial automobiles, and it’s no marvel J.P. Morgan analyst Paul Coster calls the corporate a “best-in-class long-term concept.” “An excellent story retains getting higher,” Coster mentioned. “With PLUG capitalizing on its management place in Hydrogen power and mobility options by nailing down prospects and companions that develop the TAM, enhance visibility and de-risk execution. The agency can also be capitalizing on its hovering market cap to problem shares, constructing a steadiness sheet that may allow the corporate to execute its development technique with confidence.” Nonetheless, whereas the analyst anticipates “significant profitability in 2023-24,” the inventory seems “richly valued” in comparison with friends. Because of this, Coster charges PLUG shares a Impartial (i.e. Purchase), together with a $70 worth goal. This determine implies ~9% upside from present ranges. (To look at Coster’s monitor report, click on right here) “We search for a pullback as a chance to get into this inventory,” the analyst summed up. Whereas Coster sits on the sidelines ready for PLUG inventory to reset itself, most analysts stay on board. In accordance with TipRanks analytics, out of 12 analysts, 10 say Purchase whereas 2 counsel Maintain. However there’s a catch; the analysts, whereas eager on the corporate, evidently assume shares have soared sufficient because the $60 common worth goal signifies. (See PLUG inventory evaluation on TipRanks) To search out good concepts for shares buying and selling at enticing valuations, go to TipRanks’ Greatest Shares to Purchase, a newly launched instrument that unites all of TipRanks’ fairness insights. Disclaimer: The opinions expressed on this article are solely these of the featured analyst. The content material is meant for use for informational functions solely. It is extremely necessary to do your individual evaluation earlier than making any funding.
