Plug Power (NASDAQ:PLUG)
Plug Power (NASDAQ:PLUG) traded down 4.8% on Tuesday after KeyBanc lowered their rating on the Plug Power stock to Sector Weight from Overweight and set their price target at $25. They cited “a series of headwinds” in the short term as the reason for their decision.
As analyst Sophie Karp put it, “Right when Plug Power stock is in a capital-intensive part of its growth cycle,” the recent bank collapses have created a risk-off atmosphere for project financing. PLUG will likely need external funding to have 185-200 tons/day of hydrogen production capacity commissioned by the end of the year.
The recent retirement of the CEO of Electrolyzers without a clear successor “comes at a difficult time,” Karp also said. The delays at Plug’s Georgia plant “make us skeptical if full-year targets for hydrogen production can be met,” Karp added.
Karp anticipates that residential solar-levered companies will have a “light” first quarter in the solar industry. Poor weather in key markets such as California will hurt deployments. On the other hand, backlog-driven companies such as First Solar and Nextracker, less dependent on short-term drivers such as weather, are not likely to deliver major surprises.
Karp expects Sunrun (NASDAQ:RUN) to produce a great quarter that outperforms negative forecasts. The firm is capturing a considerable market share in California. As a result, she upgraded the stock to Overweight from Sector Weight and set a price target of $27 for it.
The analyst also expects Enphase Energy to produce a successful first quarter around the upper end of its range and provide above-consensus guidance for the second quarter. On the other hand, the analyst anticipates that Sunnova will likely put in a poor performance for the quarter but will maintain its guidance for the entire year.
While Plug Power CEO Geoffrey Seiler has lofty goals, the company’s “large negative gross margins and a dismal 2022 make it hard to trust its future projections.”
Featured Image: Freepik
