Plug Power falls 5% after JPMorgan calls the company 'fully-valued,' issues price target below current level

Miquel Gonzalez/Shell
  • Plug Power fell 5% on Thursday after JPMorgan initiated the hydrogen fuel-cell manufacturer at “neutral” with a $US60 price target, representing potential downside of 14% from Wednesdays close.
  • Despite the downside price target, JPMorgan believes Plug Power is a first-mover in what represents a “massive market opportunity” that could be worth $US200 billion.
  • Plug Power is “fully-valued but a must own in the hydrogen space,” JPMorgan said.
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Plug Power fell as much as 5% on Thursday after JPMorgan said the hydrogen fuel-cell leader is “fully-valued but a must own in the hydrogen space.”

JPMorgan initiated Plug Power at a “neutral” rating with a $US60 price target, representing downside potential of 14% from Wednesday’s close. The price target is based on a discounted 2024 market cap derived from a 60-times enterprise value-to-2025 EBITDA forecast of $US534 million.

Shares of Plug Power have been on a tear in recent months, and year-to-date Plug Power is up 105% as of Wednesday’s close.

Plug Power is a first-mover in the hydrogen space, having developed proven proton exchange membrane technology that powers logistic vehicles for first-rate customers like Walmart and Amazon. The company is capitalising on what could be a $US200 billion total addressable market, JPMorgan said.

Plug Power has a strong balance sheet and planned production scale to capitalise on that opportunity, the note said.


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JPMorgan expects the New York-based company to see a 40% compounded annual growth rate that generates $US1.2 billion of gross billings by 2024.

The three big growth opportunities for Plug Power are: 1) expansion of the existing materials-handling franchise, 2) expansion into new markets and verticals including Europe, electric vehicles, and data-centre backup power, and 3) green hydrogen, JPMorgan explained.

And a recent partnership between Plug Power and Renault to jointly develop hydrogen-powered electric vehicles could “produce 40% upside to the 2024 revenue target, pushing revenues to $US1.7 billion, and cause growth to accelerate in 2025,” JPMorgan said.

Revenue in 2025 could exceed $US2 billion if Plug Power manages to successfully execute on its growth strategy, JPMorgan said, adding that it thinks this “justifies the very high multiples at which the stock trades.”


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