Today, investors in Plug Power (NASDAQ:PLUG) and PLUG stock are seeing double-digit losses.
Given the amount of red we’re seeing on the Nasdaq today, perhaps some of this downside is warranted. However, a drop of more than 10% on any given day is considerable.
Accordingly, investors may wonder — what the heck is going on with PLUG stock? After all, this has been a growth gem for investors. Indeed, PLUG stock is still up more than 600% from a year ago. Additionally, it’s a company that remains a key renewable power play in a sector with a ton of catalysts right now.
Let’s take a look at the key catalyst that’s driving PLUG stock lower today.
PLUG Stock Plunges on Morgan Stanley Report
News that an analyst has changed his or her rating on a particular company can be influential. Often, these reports are ignored by investors, as they tend to represent movements in a given stock which have already taken place.
However, a recent report from Morgan Stanley analyst Stephen Byrd sheds a pretty dim light on the growth prospects of this stock. His view? That Plug Stock’s valuation nearly fully represents its long-term value.
That’s not good for long-term growth investors.
Byrd cut his rating for the hydrogen fuel cell-maker to a “hold,” with a price target of $35, down nearly 10% from his previous price target in January.
Today’s 10% slump aligns with Byrd’s view, though PLUG stock was already on the decline prior to this news. At the time of writing, investors can pick up shares of Plug Power for under $30, a price point which has been seen as a key resistance level by market commentators.
In addition to some high-profile accounting errors I covered in a recent piece, it appears Byrd is more concerned with the valuation of PLUG stock today. Indeed, there are some pretty impressive verticals for Plug. However there’s growing sentiment that the valuation of PLUG stock may have gotten ahead of its growth potential.
That said, it’s important to remember that there’s still a consensus buy on this stock. Approximately 70% of analysts rate this stock as a buy. Plug Power is a company growth investors may want to consider at these levels.
On the date of publication, Chris MacDonald did not have (either directly or indirectly) any positions in the securities mentioned in this article.