Things only seem to be getting worse for Plug Power (NASDAQ:PLUG). Earlier this week, the hydrogen fuel cell company watched shares fall after it received a downgrade from an analyst at Truist Securities. Now, Wall Street sentiment toward the former green energy winner is trending downward even faster. JPMorgan analyst Paul Coster has lowered his price target from $14 to $12.
Granted, $12 is still significantly higher than the company’s current price of $6.27 per share, and Coster also maintained an “overweight” rating. But as this isn’t the first downgrade that PLUG stock has experienced recently, it’s worth examining in context.
Let’s take a closer look at this company and assess if investors should be worried about its growth prospects.
What’s Happening With PLUG Stock
With two Wall Street price target reductions, it’s not surprising that PLUG stock would be struggling this week. As of this writing, it is down 2.6% for the day. And it has been steadily trending downward all week, declining more than 17%.
Looking at this week alone, the outlook isn’t positive for Plug Power. But investors should also account for the fact that the majority of Wall Street analysts aren’t so negative. It currently holds a “moderate buy” consensus, with 13 out of 19 analysts rating it as a buy. It should also be noted that no analysts have issued sell ratings.
Additionally, experts have speculated that a PLUG stock short squeeze could be coming. It hasn’t happened yet, but short interest does account for almost 25% of the stock’s float. That said, the company’s fundamentals are mixed, which could cause Wall Street to sour even more on PLUG stock. As InvestorPlace contributor Noah Bolton reports:
“Plug Power has seen continued strength in their revenue figures, which in their second quarter earning results saw an increase of 72% compared to the year before. But, they also have seen a growing net loss of 36% within the same time period.”
Bolton advises investors to offload PLUG stock before it slides further. Given the reduced price targets, it’s likely that the teams at Truist and JPMorgan share this perspective. But until more investment banks follow this course, investors shouldn’t rush to offload their entire positions.
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.
