Hydrogen fuel cell systems developer Plug Power Inc. (PLUG) recently announced that it has entered into a long-term supply and logistics agreement with compressed natural gas transporter Certarus Ltd. The partnership is aimed at expanding the adoption of green hydrogen fuel.
Following the news, shares of the company declined 5.2% to close at $30.50 on Tuesday, but this drop can be attributed to wider market concerns.
With this partnership, Plug Power will supply 10 tons of green hydrogen per day to Certarus. Subsequently, Certarus’ specialised transportation fleet will safely move the hydrogen directly from production locations to end users.
Plug Power’s strong foothold in the green hydrogen space, along with Certarus’ mobility expertise in this space, is expected to make cost-effective hydrogen available to more customers across North America.
The CEO of Plug Power, Andy Marsh, said, “The partnership with Certarus is a meaningful step in building out the green hydrogen ecosystem to serve large energy sectors and in providing Plug Power the ability to flex and scale our overall delivery capabilities.”
Last month, Morgan Stanley analyst Stephen Byrd reiterated a Buy rating on the stock with a price target of $65, which implies upside potential of 112.8% from current levels.
According to the analyst, the company is likely to witness strong growth in its businesses due to continued cost reductions and growing customer demand.
Consensus among analysts is a Strong Buy based on 13 Buys and 4 Holds. The average Plug Power price target of $48.29 implies upside potential of 58.1% from current levels.
Plug Power scores a 9 out of 10 from TipRanks’ Smart Score rating system, indicating that the stock has strong potential to outperform market expectations. Shares have gained about 7.3% over the past year.