Please ensure Javascript is enabled for purposes of website accessibility

Why Nikola and Plug Power Stocks Rose Today

By Howard Smith - May 28, 2021 at 11:13AM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

An analyst started coverage of the companies with a buy rating, indicating a good amount of upside potential.

What happened

Shares of two companies counting on a growing hydrogen economy rose today, after an analyst initiated coverage with a buy rating. The stocks of electric vehicle (EV) start-up Nikola (NKLA 2.09%) and hydrogen fuel cell maker Plug Power (PLUG 6.49%) rose on the analyst comments. After jumping almost 5%, shares of Nikola settled back to a gain of about 2%, while Plug shares pared some of its rise to a gain of 3.3% as of 10:35 a.m. EDT.

So what

Analyst Gregory Lewis from research firm BTIG started coverage of both companies with a buy rating, giving Nikola a price target of $18 and Plug Power a target of $40 per share. That represents potential gains of 16% and 34% respectively, versus Thursday's closing prices.

Sign showing H2 Hydrogen for hydrogen fuel.

Image source: Getty Images.

Now what

Both companies have had their issues over the last year. Nikola, which is still pre-revenue, was called out by a short-seller for exaggerations that resulted in its founder's resignation. The company is still working to win its reputation back as it focuses on building a hydrogen fuel cell electric vehicle (FCEV) and supporting infrastructure. Plug Power also made investors nervous when it reported negative net revenue for the full year 2020 and later said it would have to restate three years of financial results. 

The unusual negative revenue came as the company paid customers warrants from sales agreements. But both companies have since reported progress in the businesses, and Plug resolved its accounting reports without any change in cash level or existing business relationships. 

Today's analyst call seems to be recognizing progress is heading in the right direction, but investors should also realize that these both remain speculative plays for growing a hydrogen economy.

Howard Smith owns shares of Nikola Corporation. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Nikola Corporation Stock Quote
Nikola Corporation
$6.83 (2.09%) $0.14
Plug Power Inc. Stock Quote
Plug Power Inc.
$29.54 (6.49%) $1.80

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
S&P 500 Returns

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 08/12/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.