FCEL Stock Alert: Can Exxon Save the Day for FuelCell Energy?


  • Shares of FuelCell Energy (FCEL) popped up nearly double digits on Monday early afternoon.
  • An Exxon Mobil (XOM) affiliate ordered equipment and support for a carbon capture demo.
  • FCEL stock appears promising but also remains highly risky.
FCEL stock - FCEL Stock Alert: Can Exxon Save the Day for FuelCell Energy?

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FuelCell Energy (NASDAQ:FCEL) shares popped higher against a modestly positive opener on Wall Street Monday. Early this morning, Exxon Mobil (NYSE:XOM) affiliate Esso Nederland placed an order for equipment and support regarding a potential demonstration of carbon capture at an Exxon facility, according to MarketWatch. Following the disclosure, FCEL stock gained over 9%, presenting an enticing though overall speculative profile.

Per the news report, Exxon has yet to make a final decision. Nevertheless, “the order advances equipment procurement and engineering work needed as it takes steps toward commercializing its carbon-capture technology.” On the oil and gas giant’s website, it claims to have “cumulatively captured more CO2 than any other company,” amounting to 120 million metric tons.

“FuelCell Energy continues to gain confidence in achieving large scale commercialization of FuelCell Energy’s carbonate technology for industrial and commercial point source carbon capture,” stated FuelCell President and CEO Jason Few. The CEO later emphasized that the its technology may address the vexing environmental challenge of CO2 emissions from industrial and commercial exhaust streams and power generation.

FCEL Stock Entices But Still Carries High Risks

According to Grand View Research, the global carbon capture and storage market reached a valuation of $3.28 billion last year. Further, experts project that the segment will expand at a compound annual growth rate (CAGR) of 6.2% from 2023 to 2030. By the culmination of the forecasted period, sector revenue should hit $5.61 billion. Therefore, FCEL stock benefits from a relevant and burgeoning total addressable market.

However, before investors pile into FuelCell, they should recognize that carbon capture doesn’t enjoy unanimous support. For example, Dénes Csala, PhD, assistant professor at Lancaster University in the U.K., believes that renewable energy development offers a better use of limited financial resources.

“Given its net energy disadvantages, carbon capture and storage should be considered a niche and supplementary contributor to the energy system, rather than be seen as a critical technology option as current climate agreements view it,” said Csala.

Subsequently, FCEL stock presents a high-risk profile. Since the beginning of this year, shares tumbled around 22%. In the trailing one-year period, they’re down more than 51%.

Why It Matters

Within the last three months, only one analyst — Craig-Hallum’s Eric Stine — covers FCEL stock with a “hold” view. Over the past one-year period, a total of seven experts covered FuelCell, all of them rating shares a hold.

On the date of publication, Josh Enomoto 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.

A former senior business analyst for Sony Electronics, Josh Enomoto has helped broker major contracts with Fortune Global 500 companies. Over the past several years, he has delivered unique, critical insights for the investment markets, as well as various other industries including legal, construction management, and healthcare. Tweet him at @EnomotoMedia.

Article printed from InvestorPlace Media, https://investorplace.com/2023/05/fcel-stock-alert-can-exxon-save-the-day-for-fuelcell-energy/.

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