Plug Power downgraded to Neutral from Buy at UBS

UBS analyst Manav Gupta downgraded Plug Power to Neutral from Buy with an unchanged price target of $4.75. The analyst says potential upside in the shares looks limited near term. The company’s “key issue” of negative gross margin is still not resolved, the analyst tells investors in a research note. The firm thinks Plug is struggling with negative gross margin and it does not see gross margin turning positive in 2024. The only way to convince long-term investors that Plug has fixed its cash-burn problem is to provide a concrete path to positive gross margin, contends UBS. It also sees the Treasury’s proposed requirements as negative for green hydrogen production, saying they would result in the cost of buying green electricity for hydrogen production increasing materially.