Andrew Percoco, an analyst from Morgan Stanley, maintained the Sell rating on Plug Power (PLUG – Research Report). The associated price target is $2.50.
Andrew Percoco has given his Sell rating due to a combination of factors surrounding the financial health and market dynamics affecting Plug Power. The path to profitability for the company appears increasingly uncertain, particularly within its equipment segment. This uncertainty could exert additional pressure on the company’s liquidity and potentially lead to the need for further equity injections, which may not be fully accounted for by the market. Despite some positive developments in Plug Power’s fuel-delivery business, there are still concerns about the volatile supply and demand of liquid hydrogen, which could hinder the anticipated margin improvements.
Moreover, there is a challenging economic environment for the green hydrogen sector in the United States, a key area for Plug Power. The high demand and limited supply of renewable energy, along with rising interest rates, have caused a significant surge in the cost of renewable energy agreements. This inflation threatens the economic viability of Plug Power’s strategy, which relies on cheaper green hydrogen costs and capex efficiencies at the plant level. Additionally, the company has experienced a revenue shortfall and continued margin compression, further contributing to the Sell rating decision.
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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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