What happened
Turning a cold shoulder to news that Plug Power (PLUG -1.29%) is expanding its partnership with FreezPak Logistics, investors are clicking the sell button on the fuel cell specialist Wednesday. What's a bit more surprising, however, is that the stock is selling off on a day when a new analyst has shared an auspicious take on it.
As of 12:08 p.m. ET, shares of Plug Power were down by 6.2%.
So what
FreezPak Logistics has been working with Plug Power since 2014, and the food logistics company seems to be happy with how things have gone, because it's looking to expand the relationship. Plug Power announced Wednesday that it will deploy fuel cell and hydrogen storage and fueling infrastructure at nine new locations -- four currently operating FreezPak's sites, as well as five more that are scheduled to open in 2023 -- and approximately 400 lift trucks.
Financial terms of the agreement were not disclosed.
In addition to the greater role that Plug Power will play in supporting FreezPak's operations, investors Wednesday learned of -- and apparently paid little mind to -- an analyst's bullish opinion on Plug Power's stock. Sam Burwell of Jefferies initiated coverage on the stock with a buy rating and a price target of $28, implying an upside of about 47% based on the stock's closing price of $19.11 Tuesday.
Now what
Investors' icy reception to Plug Power's news of its expanded relationship with FreezPak is hardly surprising. Given that the companies offered no insight into the financial terms of the agreement, the market is likely questioning how impactful it will be in terms of helping Plug Power to generate profits.
This growth stock has garnered an almost cult-like following, and its share price has soared over the past few years. However, optimistic expectations now seem to be baked into the stock price. At this point, investors are waiting to see some improvements on the bottom line that match the gains Plug Power has achieved on the top of the income statement.
