Ending yesterday a hair lower than where they finished on Friday, shares of Plug Power (PLUG 12.28%) began August without much fanfare. Today, however, investors are returning attention to the fuel cell specialist. As of 10:50 a.m. ET, Plug Power's stock is up 5.6%.
While the company hasn't reported anything today, it seems some positive coverage from an analyst is what's energizing the market.
There's not a lot of meaty news upon which the bulls are feasting today. In fact, it's rather scant: Northland Capital announced that it has initiated coverage on Plug Power with a market perform rating and a price target of $25. The price target represents potential upside of about 18% based on yesterday's closing price of $21.24. Shares of Plug Power last traded around the $25 mark in late April.
While Northland Capital's announcement is what's moving the stock today, the revelation last week that the Democrat senator from West Virginia, Joe Manchin, was backing the Inflation Reduction Act of 2022 is also a likely contributor. Passage of the legislation -- which would be a boon for hydrogen companies -- isn't guaranteed, yet Northland Capital's price target may inspire confidence in some investors that it's more likely.
News of analysts' optimistic views of stocks is a frequent catalyst for stocks' rising higher; Plug Power's movement today is just another example. It's important for investors to recognize, however, that analysts often have shorter investing horizons than the multiyear -- or longer -- investing horizons that we favor, so their price targets should be taken with a grain of salt.
Moreover, passage of the Inflation Reduction Act of 2022 is still embroiled in political wrangling. Kyrsten Sinema, a Democrat senator from Arizona, must vote for the legislation in order for it to pass, and she remains uncommitted.