FuelCell Energy, Inc. (NASDAQ: FCEL), Plug Power, Inc. (NASDAQ: PLUG) – JPMorgan says hydrogen stock is trading at ‘steep price’, downgrades FuelCell Energy

Hydrogen power company Plug Power Inc (NASDAQ: PLUG) is both a forerunner and a fast driver in the field of hydrogen fuel cells, but the stock is trading at a “high price,” according to JPMorgan.

The Take Power Analyst: Paul Coster launched the Plug Power cover with a neutral rating and a price target of $ 60.

The Plug Power thesis: Plug Power was one of the first players in the $ 200 billion electrification of the transportation and logistics market, Coster said in an opening note Thursday.

The company is able to support its year of operation with proven proton exchange membrane technology, a strong balance sheet and large customers and partners, the analyst said.

This gives the company a compelling path to achieve $ 1.2 billion in sales by 2024 and generate profits, he said.

In fact, the recent partnerships between the SK Group and Renault of Plug Power could raise its sales outlook for 2024 to $ 1.7 billion, and revenue growth will continue to accelerate in 2025, Coster said.

Still, JPMorgan’s $ 60 price target is based on a valuation model discounted 60 times the EV / 2025 EBITDA forecast of $ 534 million.

“Welcome to the investment in hydrogen fuel cells,” the analyst said.

Related Link: Why Plug Power’s Lead In Fuel Cell, Hydrogen Space Could Create an ‘Oversized Winner’

Why JPMorgan is downgrading FuelCell: In addition, Coster has downgraded FuelCell Energy Inc. (NASDAQ: FCEL) rating the stock from neutral to underweight.

The stock is up 70% since the start of 2021 and more than 800% from last year. The stocks are trading at around 50 times the futures price / sells and are “richly priced” against their peers, the analyst said.

“At this point, we expect the stock to underperform our average hedge over the next 6-12 months, although we remain constructive on the Alt Energy sector in general.”

PLUG, FCEL Price action: Shares of Plug Power fell 4.26% in Thursday’s trading, closing at $ 66.54, while FuelCell Energy plunged 8.05% to $ 17.60.

Photo courtesy of Plug Power.