FuelCell Energy, Inc. (NASDAQ: FCEL), Plug Power, Inc. (NASDAQ: PLUG) – JP Morgan says hydrogen stocks ‘at steep price’ downgrades FuelCell Energy

Hydrogen power company Plug Power Inc. (NASDAQ: PLUG) is both a first and fast car in the hydrogen fuel cell space, but the stock is trading a ‘steep price’, according to JPMorgan.

The Plug Power Analyst: Paul Coster started Plug Power coverage with a neutral rating and price target of $ 60.

The dissertation thesis: Plug Power played an early role in electrifying the $ 200 billion transportation and logistics market, Coster said in an introductory note.

The analyst said the company could back up its operating year with a proven proton exchange membrane technology, a strong balance sheet and large customers and partners.

This gives the company a compelling path to sell $ 1.2 billion by 2024 and make a profit, he said.

In fact, Plug Power’s recent SK Group and Renault partnerships could increase its sales prospects for 2024 to $ 1.7 billion, and revenue growth will continue to accelerate in 2025, Coster said.

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

“Welcome to hydrogen-fuel cell investments,” the analyst said.

Related link: Why can power’s lead in fuel cell create hydrogen space a big winner?

Why JPMorgan downgrades FuelCell: Separately, Coster downgraded FuelCell Energy Inc’s (NASDAQ: FCEL) shares from Neutral to Underweight.

The share has risen by 70% since the beginning of 2021 and by more than 800% in the past year. Shares trade at about 50 times the price / futures and are “richly valued” compared to peers, the analyst said.

“At this stage, we expect the stock to perform less than the average of our coverage over the next 6-12 months, although we remain constructive with respect to the Alt Energy sector in general.”

PLUG, FCEL Price Action: Shares of Plug Power lost 4.26% in the Thursday session and closed at $ 66.54, while FuelCell Energy fell 8.05% to $ 17.60.

Photo courtesy of Plug Power.