Plug Power Partners With Airflow to Develop Hydrogen-Based Propulsion System; Shares Pop 13%

Plug Power, Inc. (PLUG) has announced an investment in Airflow, an aerospace company known for building next-gen electric Short Takeoff and Landing aircraft. Following the announcement, PLUG shares soared 12.8% on Wednesday and were up another 3.8% in Thursday’s pre-market session at the time of writing.

Plug develops hydrogen fuel cell systems to replace conventional electric-powered batteries in equipment and vehicles. (See Plug Power stock charts on TipRanks)

The companies plan to develop a hydrogen fuel cell-based propulsion system designed for a new generation of sub-regional aircraft. Notably, Plug Power will remain Airflow’s preferred hydrogen provider.

Also, Airflow and Plug Power will jointly test a full-scale, ground-based powertrain prototype. If successful, the companies will retrofit the powertrain into an aircraft with the goal of certification.

The partnership is in sync with Plug Power’s strategy to introduce its hydrogen ProGen fuel cell technology to new markets, including a variety of missions and aircraft types within the aerospace industry.

Plug Power CEO Andy Marsh said, “From our investment in and partnership with Universal Hydrogen to our acquisition of EnergyOr we know that ensuring our ProGen solutions meet the ultralightweight and rigorous certification requirements of aviation is essential to our ownership of this opportunity.”

“We see the development and certification of a system for Airflow’s Part 23 aircraft as an ideal entry point into the aerospace market that enables expansion into larger aircraft programs,” he added. (See Analysts’ Top Stocks on TipRanks)

Following the news, Morgan Stanley analyst Stephen Byrd upgraded Plug Power’s rating to Buy from Hold with a price target of $40 (19.1% upside potential).

Overall, the Street has a bullish outlook on the stock, with a Strong Buy consensus rating based on 13 Buys and 3 Holds. The average Plug Power price target of $40.73 implies upside potential of about 21.3% from current levels.