Plug Power: Cementing Its Place as a Major Hydrogen Economy Player

TipRanks

It’s business as usual for Plug Power (PLUG) stock. Following last year’s unseemly market gains, barely two weeks into 2021, shares are already up by a staggering 111%. At this rate, last year’s 956% share haul could yet be surpassed.

The latest surge comes after the hydrogen fuel cell maker announced a new partnership to add to its expanding list of collaborations.

The company has signed an MOU (memorandum of understanding) with Groupe Renault to jointly develop several vehicle types and infrastructure in the EU. These include light commercial, taxi, and commercial people transportation and hydrogen turn-key solutions, with the 50/50 joint venture expected to kick off in 1H21.

Oppenheimer analyst Colin Rusch believes the latest deal further strengthens PLUG’s standing in the Hydrogen industry.

“With PLUG announcing another strategic partnership today, we believe the company has quickly become a global company servicing three continents and positioning itself as a critical enabler of the hydrogen economy,” the 5-star analyst said. “In working with Renault PLUG now is partnered with the No. 2 play in Europe for light commercial vehicles. We also note Renault's ownership position in Nissan and Mitsubishi as potential avenues for PLUG to expand its vehicle opportunity.”

Rusch anticipates the initial delivery of vehicles will begin late this year or early 2022 with a “goal of reaching as many as 500K vehicles by 2030.”

PLUG’s business has expanded to include most vehicle types, and Rusch notes that Class 8 trucks remain one area in transportation to which PLUG now lacks “significant exposure.”

“We would not be surprised to see the company target this segment with another partnership,” the analyst summed up.

Following the news, Rusch reiterated an Outperform (i.e. Buy) rating on PLUG shares. (To watch Rusch’s track record, click here)

The Street’s current assessment of PLUG presents an interesting conundrum. While 10 Buy ratings add up to a unanimous Strong Buy consensus rating, the average price target tells a rather disconnected story. At $47.78, shares are poised to tumble nearly 33%, should it be met over the next 12 months. It will be interesting to see how much battery power there will be left to push shares higher after the recent surge. (See PLUG stock analysis on TipRanks)

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Disclaimer: The opinions expressed in this article are solely those of the featured analyst. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.