Last week, Bloom Energy (NYSE:BE) saw shares fall as it announced a convertible senior note offering. As InvestorPlace‘s William White reports, this news led to Bloom’s daily average trading volume almost doubling. BE stock dipped as markets reacted negatively to the offering. However, shares have been all over the place today. Since opening this morning, they have fluctuated dramatically between green and red on the price chart. Today’s instability follows a Wall Street institution issuing a bullish take. Analysts dismissed the selloff as overdone and predicted significant growth in the company’s future. In fact, Morgan Stanley believes that BE stock can go as high as $30 per share as the company prepares to enter a new quarter.
How likely is it that Bloom Energy will see this type of growth in 2023? Let’s take a closer look at the analysts’ take and assess what investors can expect.
What’s Happening With BE Stock
After a week of volatility, today has been no different. As of this writing, BE stock is down almost 0.5% for the day. It hasn’t been a good week or month for Bloom, and today seems no different. BE stock could still see a growth spurt that could usher in the turnaround it needs to start making up the ground it lost in Q1.
A convertible note offering isn’t typically seen as a positive development by Wall Street. As a result, it isn’t surprising that BE stock suffered further losses last week. But for Andrew Perocco, it could actually represent a valuable opportunity. The Morgan Stanley analyst recently addressed his take on Bloom in a note to clients. In his words:
“While some were surprised to see the company come to market with a convertible debt issuance, we see this as an opportunistic (and low cost) issuance to fortify and simplify the balance sheet (potential PPA restructuring) and to ensure sustainable growth in light of an ever-changing financing environment.[] We believe the market reaction is overdone and is not representative of the true underlying fundamentals of the business and potential dilution from the issuance.”
From the analysts’ perspective, BE stock is currently trading at a low price that should serve as an attractive entry point. He has also set a $30 price target, indicating an upside potential of nearly 130%. Perocco isn’t the only analyst who remains bullish on Bloom. Sam Burwell of Jefferies recently issued a price target of $25 while maintaining a “buy” rating for BE stock. That may not be as high as Perocco’s, but it is still a substantial increase from Bloom’s current price of just over $13 per share. While it still receives a “moderate buy” consensus on TipRanks, investors shouldn’t ignore the fact that more analysts are starting to lean in the stock’s favor.
Why It Matters
If someone looks only at recent numbers, it’s easy to write off a stock like Bloom Energy. But Perocco and his team have seen the bigger picture and clearly understand how much potential BE stock has to keep growing as market conditions shift in its favor. The company is a leader in the hydrogen fuel cell field, a technology poised to help usher in the green revolution. The market is expected to expand at a compound annual growth rate (CAGR) of 28% over the coming years, reaching $18.440 billion by the end of the decade.
That leaves Bloom with more than enough room to run, suggesting BE stock can absolutely hit the $30 mark.
On the date of publication, Samuel O’Brient 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.
