What happened
Pioneer actions in hydrogen fuel cells Plug Power (NASDAQ: PLUG) are firing today, 28.2% as of 10 am EST, after the company announced a new alliance with South Korean industrial giant SK Group last night.
In a deal valued at $ 1.5 billion, Plug Power plans to sell a 10% stake in itself to SK Group, valuing the new shares issued at $ 29.29 each – but investors who already owned Plug are doing much better than that. Your shares are now worth $ 45.50 each in the morning trading session.
Image source: Getty Images.
And
Why are Plug Power investors so excited? As the company explained in last night’s announcement, allying itself with SK Global increases its access to South Korea’s “Hydrogen Economy Roadmap by 2040” plan, which expects to put 6 million hydrogen fuel cell cars on the roads from South Korea over the next 20 years, building 1,200 refueling stations to supply them, and producing 5 million tons of hydrogen fuel per year. As a fuel cell manufacturer and hydrogen producer, Plug Power is in a position to profit from at least two of the legs of this hydrogen triad – and probably all three.
What now
Wall Street professionals are celebrating the news. As TheFly.com reports, at least three separate analysts have already raised their Plug Power stock price targets, with Cowen & Co. valuing them at $ 50 per share 12 months from now, B. Riley Securities saying $ 52, and HC Wainwright going as high as $ 60.
Plug Power, which had already promised investors that by 2024, will be making $ 1.2 billion in annual “gross revenue” and earning $ 200 million a year, should now do significantly better than that, says B. Riley Securities . HC Wainwright now projects that by 2030, the company could have $ 12.9 billion in annual revenue and $ 3.9 billion in annual operating profit – twice previous estimates.