Wednesday, May 29, 2024
Stock Market

Plug Power (PLUG) Stock Pops as UBS Initiates Coverage

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Although it has suffered sharp losses this year due to various macroeconomic headwinds, Plug Power (NASDAQ:PLUG) is finally rewarding embattled stakeholders with a strong move in the midweek session. That’s because UBS Group just initiated coverage on PLUG stock with a “buy” rating, bolstering enthusiasm toward the business. This news comes amid increasing interest from hedge funds.

Specifically, UBS analyst Manav Gupta provided the assessment for PLUG stock, along with a price target of $26. Against the Dec. 13 closing price, the analyst’s forecast implies a more than 84% return. According to The Motley Fool, Gupta justifies the bullish take on Plug as the company “aims to be a one stop shop and market leader in the space.”

In addition, the analyst anticipates that Plug Power will generate revenue of $5 billion in 2030. Per data from Gurufocus, the company posted revenue of $502.3 million in 2021. In the trailing 12-month period, the company is also looking at nearly $643 million in sales.

What adds to the enthusiasm for PLUG stock — which is up 9% as of this writing — is the analyst backdrop. Fundamentally, not all Wall Street experts feel confident about Plug Power. For instance, Oppenheimer lowered its price objective from $63 to $31 back in November. Wells Fargo also lowered its expectation from $29 to $21 in late October. However, the overall assessment for shares remains positive.

Hedge Funds Look to Add Exposure to PLUG Stock

According to TipRanks, the underlying firm carries a consensus “moderate buy” rating. This breaks down to 12 buys and five holds, with no sell ratings. The average consensus price target also stands at $28.35. That figure is double the Dec. 13 closing price.

Additionally, hedge funds appear keen on building their positions in PLUG stock. To be fair, hedge fund holdings of Plug Power recently peaked during the third and fourth quarters of 2021. But this category has been gradually rising this year as well. In Q3, hedge fund holdings pinged at 7.26 million shares, a more than 14% improvement from Q1 2022. According to TipRanks, the confidence signal among these institutional investors rates as “very positive.”

To be fair, of course, PLUG stock has incurred a rough year so far. Since its January opener, shares have tumbled about 47%. And while Wednesday’s bump higher will likely embolden believers, shares have only gained about 7% over the last six-month period.

Moving forward, though, analysts do command fundamental reasons to gamble on PLUG stock. Back in June 2022, The Wall Street Journal covered the company’s roughly $315 million investment in a Belgium-based plant. The facility aims to leverage Plug Power’s production of fuel made using renewable energy. Naturally, geopolitical flashpoints bolster urgency for such initiatives, possibly making PLUG stock a case of smart speculation.

On the date of publication, Josh Enomoto did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

A former senior business analyst for Sony Electronics, Josh Enomoto has helped broker major contracts with Fortune Global 500 companies. Over the past several years, he has delivered unique, critical insights for the investment markets, as well as various other industries including legal, construction management, and healthcare.

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