If you’re on the lookout for a resounding success story in 2020, look no further than Plug Power (PLUG). Alternative energy companies have caught investors’ imaginations this year and the hydrogen fuel cell player has been a prime beneficiary; Shares are up by a humongous 674% year-to-date.
But the positive developments keep rolling in. On Monday, the company announced a new joint initiative with French transportation engineering company Gaussin. The two will develop a line-up of transportation vehicles running on Plug Power’s ProGen engine. The collaboration’s results will hit the market next year, targeting logistic centers, seaports, and airports.
Oppenheimer analyst Colin Rusch believes the deal validates PLUG’s “market position as a leader in mobile fuel cell technology, while positioning its hydrogen business for accelerating growth.”
“We believe Gaussin’s expertise and positioning in logistics and heavy-duty vehicles suggest that PLUG will expand its footprint in material handling into multiple new locations like seaports, airports, and logistics centers on a global basis,” the 5-star analyst said. “We see the opportunity for PLUG to leverage its fueling expertise into these areas and see the potential for its hydrogen fuel business to become substantially bigger than its hardware business over the next decade.”
In Europe, there is a growing emphasis on a shift to alternative energies; The decarbonization of airports and ports is high on the European Green Deal‘s agenda with a “specific emphasis on green hydrogen and electrification.”
Rusch believes that in addition to the deal expanding Plug Power’s footprint in the region, the supplementary revenue stream “de-risks 2021/2022 estimates.”
Furthermore, the “integrated solution (engines and electrolyzers), provides PLUG multiple paths to achieving its $1.2B revenue target in 2024.”
Overall, Rusch rates PLUG an Outperform (i.e. Buy) along with a $23 price target. Despite Rusch’s confidence in the PLUG story, his target represents possible downside of ~6%. (To watch Rusch’s track record, click here)
It’s a similar story amongst Rusch’s colleagues; All 9 recent PLUG reviews rate the stock a Buy, providing the company with a Strong Buy consensus rating. However, the $23.11 average price target is almost identical to the Oppenheimer analyst’s and implies shares will decline by 6% (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.