Provider of hydrogen fuel cell systems Plug Power (NASDAQ:PLUG) continued to be on an upward trajectory in Wednesday’s trading amid a glut of positive updates. The company stated that its Georgia plant was now actively producing hydrogen. Plug also got some good news in the form of a $1.6 billion loan facility from the Department of Energy and entered into a $1 billion agreement to sell its common stock. The optimism around the stock has resulted in PLUG surging by more than 60% over the past five trading sessions. However, this exuberance is not shared by BMO Capital analyst Ameet Thakkar.
The analyst downgraded the stock to a Sell from a Hold and lowered the price target to $2.50 from $3.50. Thakkar’s price target indicates a downside potential of 33.7% at current levels.
He also expressed doubts about Plug Power’s optimistic timeline for securing a Department of Energy loan. Despite positive aspects of the business update, Thakkar cited concerns about the company’s financial challenges, including the need for significant year-over-year improvement, reduced capital expenditures, and less equity financing. The analyst anticipates the need for substantial equity issuance in the first quarter, potentially impacting PLUG shares.
Is Plug Power a Good Stock to Buy?
Analysts remain sidelined about PLUG stock with a Hold consensus rating based on seven Buys, 14 Holds, and three Sells. The average PLUG price target of $7.55 implies an upside potential of 95.1% at current levels.
