Wall Street Favorites: 3 Hydrogen Stocks With Strong Buy Ratings for May 2024


  • Here are some of the top hydrogen stocks to buy.
  • Linde (LIN): Analysts at Mizuho recently upgraded LIN to a buy rating.
  • Air Products and Chemicals (APD): BMO Capital raised its price target to $263 a share, with an outperform rating.
  • Defiance Next Gen H2 ETF (HDRO): Always be sure to diversify your portfolio with an ETF.
Hydrogen stocks - Wall Street Favorites: 3 Hydrogen Stocks With Strong Buy Ratings for May 2024

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Crisis will eventually lead to opportunity with some of the top hydrogen stocks to buy.

For one, the industry is still waiting to see if restrictive Section 45V tax credits will be loosened. Should that happen, we could see some positive action with related stocks. 

Two, we also have to remember that according to MarketsandMarkets, the global hydrogen market could be worth about $410.6 billion by 2030 from $242.7 billion in 2023.  

Three, as United States Energy Secretary Jennifer Granholm, once noted, “Clean hydrogen is the ‘Swiss Army Knife’ of zero-carbon solutions because it can do just about everything: Powering trucks, buses, and airplanes… Heating homes and fertilizing crops… Revolutionizing shipping… and cleaning up America’s manufacturing industry.”

We also have to remember that hydrogen emits no greenhouse gas, and the only waste product is vapor–which is a key benefit for a net-zero future.  

Once the roadblocks are cleared–most notably the 45V credits–we could see strong momentum make a big return to hydrogen stocks, such as the following.

Hydrogen Stocks to Buy: Linde (LIN)

Logo of Linde AG (LIN) in Hanover, Germany - The Linde Group is a multinational chemical company
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Just a few days ago, I said, “After catching support dating back to February, and becoming over-extended on RSI, MACD, and Williams’ %R, Linde (NASDAQ:LIN) is attempting to pivot higher. From its last traded price of around $423, I’d like to see it initially refill its bearish gap at around $440. With a good chunk of negativity priced in, I’d use weakness as an opportunity.”

Since then, LIN bounced from support at around $423 to $434.39. From here, I still believe it’ll refill its bearish gap at $445. And eventually, I’d like to see it run back to $475. Helping, the company just declared a dividend of $1.39, and it also just received an upgrade to a buy rating from analysts at Mizuho. The firm says LIN is poised to outperform with its earnings growth and gave the stock a target price of $510 a share.

Give LIN some time. It’s another one of the top hydrogen stocks to buy now.

Air Products and Chemicals (APD)

Air Products (APD) logo on the Arts Quest building, Air Products is a sponsor of Air Products Town Square at Arts Quest in Bethlehem, PA
Source: Andy Borysowski / Shutterstock.com

The last time I mentioned Air Products and Chemicals (NYSE:APD), I said, “I’d still like to see APD refill its bearish gap around $260 initially. From there, it could easily test $272 as the hydrogen story gains momentum. Plus, as we wait for the stock to recover more lost ground, we can collect its dividend of $1.77.”

That was on Mar. 18, as APD traded at about $230. Today, it’s up to $250.55 and picking up steam. I still believe it’ll refill its bearish gap, and potentially test a prior high of $275.

Analysts are bullish on APD, too. TD Cowen, for example, just raised its price target on APD to $320 with a buy rating. “Based on the anticipated $3.65 EPS in the fourth fiscal quarter of 2024, the analyst projects an EPS of $14.60 for 2025, surpassing the consensus estimate of $13.41,” as noted by Investing.com.

BMO Capital also raised its price target to $263 as share, with an outperform rating. Even Bank of America has a buy rating, with a price target of $264 a share.

Defiance Next Gen H2 ETF (HDRO)

a symbol with H2 (hydrogen) on it and a fill-up tank
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One of the best ways to diversify with top hydrogen stocks to buy is with an ETF, such as the oversold Defiance Next Gen H2 ETF (NYSEARCA:HDRO).

Not only does this ETF offer a good deal of exposure to hydrogen stocks, but it does so at an impressively lower cost. For example, the HDRO ETF, which has an expense ratio of 0.30%, trades at around $5 a share. With this ETF, investors gain exposure to stocks such as Plug Power (NASDAQ:PLUG), Bloom Energy (NYSE:BE), Ballard Power (NASDAQ:BLDP), Fuel Cell Energy (NASDAQ:FCEL), and dozens more.

To be included in this ETF, a company must generate 50% of its revenue from hydrogen and/or a fuel cell project, or be involved in developing fuel cells or hydrogen sources, according to Defiance ETFs.

While the HDRO ETF is seeing strong overhead resistance at $5.38, I’d eventually like to see it retest a high of about $6.80. That will take a good deal of patience, though.

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

Ian Cooper, a contributor to InvestorPlace.com, has been analyzing stocks and options for web-based advisories since 1999.

Article printed from InvestorPlace Media, https://investorplace.com/2024/05/wall-street-favorites-3-hydrogen-stocks-with-strong-buy-ratings-for-may-2024/.

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