Plug Power Inc (NASDAQ: PLUG) is flying in the market this morning, leaving many wondering what’s going on. After all, the company hasn’t issued any press releases or filed anythingwith the SEC. Noentheless, there’s a good reason for the gains.
Recently, Oppenheimer analyst Colin Rusch rased the price target on PLUG stock significantly. In fact, he set the new price target to $26 per share, doubling it from $13.
What Drove Rusch’s Decision To Increase PLUG Stock’s Price Target?
There are a few reasons Colin Rusch took such a bullish stance on Plug Power. First and foremost, Joe Biden took the win in his bid for the presidency against current US President, Donald Trump. This is expected to be a big benefit to alternative energy companies considering Biden’s stance in terms of global climate change and energy use.
As a result of Biden’s win, many experts expect to see tax benefits, funding, and other perks handed down from the United States government to companies and consumers that take part in going green.
Nonetheless, this price target is a big deal. After all, the stock has climbed more than 500% year to date, and any implication that further gains are ahead is an exciting concept. Nonetheless, the investor thirst for clean energy stocks that has driven such dramatic gains is expected to continue doing more of the same.
At the same time, PLUG recently released its financial results for the third quarter. Revenue climbed 79.9% year over year and blew away analyst expectations. At the same time, a the company reported a loss of $0.04 per share, beating expectations by $0.03 per share.
Not to mention, PLUG also raised its guidance for the 2020 fiscal year. Billings are now estimated to come in between $325 and $330 million, an increase of $15 million on the low end and $16 million on the high end.
In a statement, Rosche had the following to offer about PLUG stock:
As investors look for exposure to hydrogen vehicle growth, we believe PLUG is best positioned to benefit from all key areas in the supply chain with differentiated, commercially proven technologies. We believe valuation is the biggest question for investors as the market negotiates growth multiples in the context of potentially stable tax policy and historically low interest rates. Given the scale of the opportunity and PLUG’s IP portfolio, we are raising our PT multiple in line with disruptive technology peers and current market dynamics as we maintain our constructive stance on shares.
The Bottom Line
The bottom line here is simple, Rosche pointed out quite a few facts that proponents of Plug Power have been preaching for some time now. The fact of the matter is that the world is working to go green, reducing the carbon footprint we leave on the planet and improving quality of life for all for millenia ahead.
PLUG sits in the middle of this equation. The company is a key player in the hydrogen fuel cell space, a space that allows for the generation of power by capturing and processing carbon. So, it produces clean power by cleaining the carbon that would generally be uleashed into the environment. It’s a win/win.
With a new green-focused president taking office soon, PLUG being an integral part of the US carbon capture and fuel cell market, the world’s push for green energy, and an obvious investing community infatuation with the stock, PLUG is one to watch closely ahead.
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