What happened
While the temperature has been dropping in many parts of the country, shares of Plug Power (PLUG 9.47%) are heating up this week. For the third day in a row, shares of the fuel cell specialist are drawing attention from bulls. Today's catalyst for the stock's strong upward momentum is positive coverage from an analyst -- something that hasn't been the case for the recent past.
As of 10:10 a.m. ET, shares of Plug Power are up 6.4%.
So what
Setting a price target of $26, Manav Gupta, an analyst at UBS, initiated coverage on Plug Power and assigned a buy rating on the stock, according to The Fly. As of the end of yesterday's trading session, the price target implies upside of 84%. Gupta predicates the auspicious belief of Plug Power's upside on the idea that the company "aims to be a one stop shop and market leader in the space." Moreover, Gupta forecasts Plug Power will generate sales of $5 billion in 2030.
In 2021, Plug Power reported revenue of $502.3 million.
Investors are likely celebrating the news, considering the flurry of bearish sentiment that Wall Street has espoused for the hydrogen hopeful last month.
Now what
Keeping up with what analysts are thinking about a given stock is certainly a worthwhile endeavor; however, it's critical for those on Main Street to recognize that analysts frequently have time horizons that are much shorter than multi-year holding periods. It's quite possible that Plug Power achieves Gupta's forecast and reports $5 billion on the top line in 2023, but whether the company will demonstrate profitability is far, far less certain. Consequently, hydrogen investors will want to tread carefully in weighing whether Plug Power should power their portfolios.
