Citi downgrades Plug Power to Sell on ‘limited’ liquidity, dilution

Citi downgraded Plug Power to Sell from Neutral with a price target of $2, down from $3.25. The analyst believes the company’s “limited” liquidity, relatively high-cost structure, dilution from capital raises and “tough” competition should continue to weigh on the stock. Plug Power reported the issuance of 77M shares at a $3.90 price in February, which represents 13% of the total shares, the analyst tells investors in a research note. The firm believes this dilution will continue as the company needs more cash and as profitability remains elusive. Raising prices in an oversupplied electrolyzer market may either negatively impact sales more than anticipated or not materialize in the face of competition, contends Citi.