Plug Power falls 7% after JPMorgan calls the company 'fully-valued,' issues price target below current level
Plug Powerfell 7% on Thursday after JPMorgan initiated the hydrogen fuel-cell manufacturer at "neutral" with a $60 price target, representing potential downside of 14% from Wednesdays close.
- Despite the downside price target, JPMorgan believes Plug Power is a first-mover in what represents a "massive market opportunity" that could be worth $200 billion.
- Plug Power is "fully-valued but a must own in the hydrogen space," JPMorgan said.
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Plug Power fell as much as 7% on Thursday after JPMorgan said the hydrogen fuel-cell leader is "fully-valued but a must own in the hydrogen space."
JPMorgan initiated Plug Power at a "neutral" rating with a $60 price target, representing downside potential of 14% from Wednesday's close. The price target is based on a discounted 2024 market cap derived from a 60-times enterprise value-to-2025 EBITDA forecast of $534 million.Shares of Plug Power have been on a tear in recent months, and year-to-date Plug Power is up 105% as of Wednesday's close.
Plug Power has a strong balance sheet and planned production scale to capitalize on that opportunity, the note said.Read more: Cathie Wood's ARK Invest runs 5 active ETFs that more than doubled in 2020. She and her analysts share their 2021 outlooks on the economy, bitcoin, and Tesla.
JPMorgan expects the New York-based company to see a 40% compounded annual growth rate that generates $1.2 billion of gross billings by 2024.The three big growth opportunities for Plug Power are: 1) expansion of the existing materials-handling franchise, 2) expansion into new
Revenue in 2025 could exceed $2 billion if Plug Power manages to successfully execute on its growth strategy, JPMorgan said, adding that it thinks this "justifies the very high multiples at which the stock trades."
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