Plug Power (NASDAQ:PLUG)
Plug Power (NASDAQ:PLUG) and First Solar (NASDAQ:FSLR) were down in trade on Monday due to Morgan Stanley’s decision to downgrade both companies to Equal Weight from Overweight with respective price targets of $15 and $194. Despite this, Morgan Stanley said it is still optimistic about the long-term growth in renewables.
Andrew Percoco, an analyst at Morgan Stanley, stated that he approves of Plug’s plan to vertically integrate its green hydrogen ecosystem but that he is more cautious regarding the pace of revenue growth and margin improvement, as well as the potential near-term financing risks are given the continued elevated levels of cash burn.
Since the announcement of the Inflation Reduction Act (IRA), the share price of First Solar has nearly tripled. However, this price increase has already priced in the significant benefits of the IRA. The company now faces the risk of increased competition as competitors expand their operations in the United States, given the very supportive $0.17/watt potential subsidy level that is available to panel manufacturers.
Bloom Energy (NYSE:BE), which is seen to be a “major beneficiary” of the expanding value proposition of distributed energy, increased system instability, grid capacity restrictions, and the $3/kg clean hydrogen tax credit that is included in the IRA, is Percoco’s top selection in the clean technology sector.
In addition, Morgan Stanley started Enphase Energy (ENPH) at Equal Weight and Sunnova Energy at Overweight, noting exposure to a “vastly under-penetrated” residential rooftop solar installer market with high long-term growth potential.
In a report just published on Seeking Alpha, Easy Investing states that Bloom Energy has a “fantastic growth plan,” growing its reach in the United States and worldwide into the areas of hydrogen, CCUS, biogas, and marine.
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