Plug Power Inc. PLUG reported Wednesday fourth-quarter revenue that missed expectations, but the company reaffirmed its 2023 sales forecast.
The Plug Power Analyst: KeyBanc Capital Markets analyst Sangita Jain retained its Overweight rating and reduced the price target from $31 to $25, citing the risk of project delays.
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The Plug Power Thesis: Plug Power is uniquely positioned as an integrated player as the green hydrogen market develops in the US and Europe, analyst Jain said. The company is a beneficiary of the US Inflation Reduction Act of 2022 and the European Green Deal, she added.
“We are encouraged by the momentum in the business but watchful for delays, given the multi-pronged growth approach,” the analyst said.
2023 included a long list of things to do and the timing of the early deliverables will be key, Jain said.
The company looks forward to having more than 200 tons per day of green hydrogen production commissioned by the end of 2023, she noted. With the imminent commissioning of the Georgia plant, Plug Power expects $400 million in electrolyzer sales, and deployment of 30-megawatt stationary power products, she added.
The analyst also noted that the company expects to add 80 new material-handling sites in 2023.
“The cadence of these deliverables in the early part of the year will be critical to shaping the 2H outlook, Jain said. These deliverables carry execution and timing risks, she added.
The analyst noted that Plug Power traded at under five times the estimated earnings for 2024 and twice the estimated earnings for 2025. The valuation, she said, is attractive, especially for a company that has significant top-line and margin expansion potential. The shares offer value even at KeyBanc’s reduced target, she said.
Until mid-2023, when some first-half deliverables will be known and the final guidelines on clean hydrogen recognition for positive train controls, or PTC, are provided, the shares will likely be range-bound, Jain said.
Plug Power Price Action: Plug Power shares closed Wednesday’s regular session down 4.44% at $14.21 and lost another 2.18% to $13.90 in after-hours trading, according to Benzinga Pro data.
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