Shares of hydrogen fuel cell company Plug Power (PLUG 14.00%) got another lift from a Wall Street analyst Wednesday and are up 6.5% in 2:55 p.m. EST trading after analysts at Bernstein began covering the shares.
Bernstein initiated coverage of Plug with a $75 price target and an outperform rating (i.e., buy). In a note covered on TheFly.com this morning, the bank highlighted heavy-duty transport vehicles as the most attractive part of the market for using hydrogen fuel cells as a power source.
Trucks, said Bernstein, will be "the single most important growth market for fuel cells" going forward.
At first glance, that might sound like bad news for Plug Power, which has historically focused on producing fuel cells for warehouse work -- powering electric forklifts. But last month, Plug expanded its operations through an alliance with France's Renault, promising to build "fuel cell-powered light commercial vehicles" in France.
Again, this raises questions -- light commercial vehicles being by definition not heavy-duty transport vehicles. Still, the fact that Plug is already moving up the size scale, from forklifts to vans, suggests that moving further on up, from light vehicles to heavy vehicles, won't be as big of a jump as it would have been to move directly from, say, forklifts to tractor trailers.
My reservations that any stock, not just Plug, can conceivably be worth 65 times sales notwithstanding, Bernstein's recommendation makes a little more sense when viewed from that perspective, at least.