Among the publicly traded hydrogen fuel cell manufacturers, Plug Power (NASDAQ:PLUG) is probably the most well-known. Indeed, millions of shares of PLUG stock change hands each and every day trading day.
Yet this doesn’t mean that Plug Power is always popular among investors. Currently, at least judging by the trajectory of its share price, the company appears to be out of favor.
Contrarian traders, I believe, should view the decline of Plug’s shares as a buying opportunity. PLUG stock has been known to rally fast and far, and right now is a great time to apply the old “buy low, sell high” principle.
Besides, not everyone is bearish on Plug Power. In light of the company’s bullish catalysts, some experts on Wall Street are predicting upcoming gains by the stock.
A Closer Look at PLUG Stock
The peaks are high, and the valleys are deep. That is the case for PLUG stock as volatility is the norm for it, and the risk posed by this clean-energy company is high.
Do you recall the time in late 2020 and early 2021 when the stock made a round trip from $25 to $70 and back? It’s likely that Reddit users precipitated that rally, though I can’t actually prove it.
Then there was the pop and the drop from $25 to $45 and back, which took place in late 2021 and early 2022. It seems, then, that PLUG stock is a trader’s dream but an investor’s headache.
Today the stock is changing hands for around $22. Maybe it’s reloading for another powerful advance.
How high could PLUG stock go? Let’s see what some of the experts have to say; their assessments should be informational, as well as motivational.
Acquiring and Expanding
H.C. Wainwright analyst Amit Dayal maintained a “buy” rating on Plug Power, while issuing a price target of $78. Dayal believes that the company’s acquisition of Frames Group should help it achieve its objective of raising its installed electrolyzer capacity to three gigawatts by 2025.
Plug Power finalized its acquisition of Frames Group, which specializes in turnkey systems integration for the energy sector, in December 2021.
“The Frames Group’s process and control systems integration expertise, combined with Plug Power’s world-class electrolyzer stack technology, will help us attain our goal of producing over 1,000 tons per day of green hydrogen by 2028,” Plug Power CEO Andy Marsh said at the time.
Meanwhile, KeyBanc Capital Markets analyst Leo Mariani initiated coverage of PLUG stock with an “overweight” rating and a price target of $40.
Mariani focused not so much on the Frames Group acquisition, but on Plug Power’s international expansion efforts.
With crucial joint ventures abroad, the company could “grow its business internationally as Europe, South Korea, and Australia are very focused on making hydrogen an integral part of their energy futures,” the KeyBanc analyst explained.
A “Positive” Outlook
To the roster of PLUG stock bulls, we can add Susquehanna Financial Group analyst Biju Perincheri. Reportedly, Perincheri’s price target for the stock is $26.
Granted, that price objective isn’t as ambitious as the other ones that I mentioned. However, Perincheri also has a “positive” rating on the stock.
“Positive” is an unusual analyst rating, so I’ll explain it. For Susquehanna’s analysts, a “positive” rating predicts that the stock will appreciate by at least 15% over the next 12 months.
Perincheri clarified that the “positive” rating reflects Plug Power’s “top-line growth potential.” Moreover, the Susquehanna analyst anticipates that the firm’s green-hydrogen ecosystem will expand over the next several years.
In light of that, Plug Power’s admittedly “rich valuation” should be justified, according to the bulls.
The Bottom Line
It’s interesting when there’s a divergence between a stock’s price movement and the predictions of Wall Street’s analysts. In some instances, it makes sense to side with the experts.
I’m not saying that analysts’ price targets are always accurate. At the end of the day, you have to decide whether they are realistic.
That being said, the experts have brought up some compelling points about Plug Power. As they’ve pointed out, a number of growth drivers could propel the shares higher in 2022.
Therefore, even while other traders are selling the name, this might be a good time to consider buying it.
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.
