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Why Plug Power Stock Popped Today

By Rich Smith - Apr 6, 2021 at 3:57PM

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Analyst cuts price target, Plug's price rises. Go figure.

What happened

Plug Power (PLUG -6.58%) stock is acting weird again. Yesterday, shares of the fuel cell pioneer dropped despite news that it was teaming up with Chart Industries and Baker Hughes to form a $1.2 billion "FiveT Hydrogen Fund" to support investments in "clean hydrogen infrastructure projects at scale."

Today, Plug Power stock is doing the opposite: Rising 4.4% as of 3:40 p.m. EDT on news that an analyst has cut its price target on Plug shares.

An ascending green arrow on a black stock screen.

Image source: Getty Images.

So what

Specifically, reports today that analysts at investment bank Piper Sandler have reduced their price target for Plug stock from $48 to $42 a share.

TheFly quotes Piper warning that Plug faces a "challenge" from more established green energy sources such as wind, solar, and rechargeable electric vehicles powered by lithium batteries. The more popular those renewable energy sources become, the less perceived need there may be for yet another green energy source such as hydrogen fuel cells -- and the less valuable Plug Power stock will be.

Now what

That's the bad news. Now here's the good: If Plug and its friends do succeed in convincing industry that fuel cells are an essential component of good green energy policy, the company might achieve its target of producing 500 metric tons per day (TPD) of "green" hydrogen gas for fuel by 2025 -- and 1,000 TPD by 2028.

In Piper's estimation, that could be worth $1 billion in annual revenue -- twice today's levels -- for Plug by 2025, and $2 billion by 2028. And despite today's lowered price target, the analyst thinks that would be enough to justify keeping at least a "neutral" rating on Plug stock, just in case things work out.

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Stocks Mentioned

Plug Power Inc. Stock Quote
Plug Power Inc.
$15.54 (-6.58%) $-1.09
Chart Industries, Inc. Stock Quote
Chart Industries, Inc.
$171.56 (-3.33%) $-5.91
Baker Hughes, a GE company Stock Quote
Baker Hughes, a GE company
$35.69 (-0.06%) $0.02

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