In a report released today, Jeff Osborne from TD Cowen maintained a Buy rating on Plug Power (PLUG – Research Report), with a price target of $7.00.
Jeff Osborne has given his Buy rating due to a combination of factors including financial stability and strategic initiatives. Plug Power has secured sufficient capital to maintain operations through 2024, alleviating concerns regarding its financial viability. The anticipation of a $1.6 billion loan from the Department of Energy (DOE), which is expected to be conditionally approved shortly, provides optimism for the company’s future financial structure. Moreover, Osborne recognizes Plug Power’s commitment to reducing its cash burn, with a projected drop of over $1 billion for FY23, underpinned by significant cuts in capital expenditures and positive inventory-related tailwinds. The company’s cost-saving strategies, including a freeze on additional spending on certain facilities and a $75 million initiative to reduce costs, further demonstrate prudent fiscal management.
Despite the absence of formal financial guidance for FY24 and the Georgia facility not yet operating at full capacity, Osborne appears confident in the company’s revenue growth potential and improving gross margin. Management’s engagement with customers on price increases, which has been received favorably, also bodes well for Plug Power’s profitability moving forward. Additionally, Osborne seems to take a positive view on potential regulatory easements related to the implementation of 45V, which could further benefit the company. These factors, combined with a cautious yet optimistic outlook for the company’s financial performance, underpin Osborne’s Buy rating for Plug Power.
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Plug Power (PLUG) Company Description:
New York-based Plug Power, Inc. is an electrical equipment manufacturing company. It develops hydrogen fuel cell systems that replace conventional batteries in equipment and vehicles powered by electricity.
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