Plug Power’s Hydrogen Fuel Cells Could Be the Future of Bussing

I must admit, I’m always a little bit nervous when I write about Plug Power (NASDAQ:PLUG). The tensions tend to run hot with this one: people often either like PLUG stock a lot, or else they’re massively bearish on it.

3d render image of hydrogen energy fuel cell from Plug Power

Source: Shutterstock

Still, I must venture into the crossfire and submit my opinion. I don’t get to issue bullish and bearish calls from the proverbial ivory tower like Wall Street analysts typically do.

So please, don’t shoot the messenger when I tell you that some big-bank analysts are slashing their price targets on PLUG stock.

We’ll delve into that, along with some potentially good news concerning Plug Power and a huge deal involving clean-powered buses.

A Closer Look at PLUG Stock

First, it’s time to start off with an appetizer of technical analysis.

A year ago, the debate among price watchers concerned whether PLUG stock would continue to trade as a penny stock (defined as a stock that trades under $5 per share).

Thankfully, the Plug Power share price broke above the $5 level during the summer of 2020. Moreover, it hasn’t fallen back below $5 since that time.

In a spectacular multi-month run-up, PLUG stock catapulted to a 52-week high of $75.49 on Jan. 26, 2021.

Unfortunately, folks who chased the stock near that price were promptly punished. As it turned out, Plug Power shares commenced a steep decline, bottoming out at $18.47 on May 11.

On the other hand, a recovery seems to be in the works. PLUG stock opened at $30.67 on June 3, signaling the possibility of another revisit of $75 and beyond — though as we’ll see, not every analyst is optimistic about this.

Wall Street Weighs In

It appears that there’s little consensus among Wall Street analysts as to where Plug Power shares will be in 12 months.

B. Riley analyst Christopher Souther cut his price target on PLUG stock from $70 to $50, which is rather drastic. Despite this, Souther has a “buy” rating on the stock.

Barclays analyst Moses Sutton also reduced his price target on the shares. His numbers are quite different, though: Sutton cut his target from an already-low $28 to $24.

Moreover, to add insult to injury, Sutton’s rating on PLUG stock is “sell.”

H.C. Wainwright’s Amit Dayal, in contrast, seems to be bullish on Plug Power. He’s maintaining a “buy” rating on the stock as well as a price target of $78.

In defense of his optimistic call, Dayal cited Plug Power’s balance sheet, which “remains solid with more than $5B of cash available to fund growth efforts.”

A Bus Deal – Or Maybe Two

One part of the global green hydrogen economy that is sometimes ignored is the world’s vast network of buses.

As I learned from InvestorPlace contributor Dana Blankenhorn, buses are a huge market — worth $38.2 billion last year, and growing at nearly 10% annually.

Let’s face it — buses use a whole lot of fuel. And Plug Power can offer cost savings and regulatory compliance with its relatively clean and efficient hydrogen fuel cell solutions.

In this vein, Plug Power recently announced a deal to work on hydrogen buses with British defense contractor BAE Systems (OTCMKTS:BAESY).

According to the collaborative framework, Plug Power and BAE Systems will work together “to supply zero-emission powertrains to heavy-duty transit bus OEMs [original equipment manufacturers] in North America.”

Not only that, but Plug Power has also entered a deal with French automaker Groupe Renault (OTCMKTS:RNLSY) to build hydrogen-powered delivery vans and buses.

The Bottom Line on PLUG Stock

Could Plug Power become the go-to supplier of hydrogen fuel cells for the world’s buses?

It’s a lucrative market and Plug Power is establishing its foothold.

Maybe some Wall Street analysts don’t appreciate Plug Power’s progress. That shouldn’t be a problem, however.

Informed investors can ignore the skeptics and hold their shares for (hopefully) powerful future gains.

On the date of publication, David Moadel did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

David Moadel has provided compelling content — and crossed the occasional line — on behalf of Crush the Street, Market Realist, TalkMarkets, Finom Group, Benzinga, and (of course) InvestorPlace.com. He also serves as the chief analyst and market researcher for Portfolio Wealth Global and hosts the popular financial YouTube channel Looking at the Markets.


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