A deal with French automaker Groupe Renault on Tuesday took Plug Power Inc.’s shares to the highest level in nearly 15 years, with an analyst calling the potential joint venture “transformative” for the American company.
Connect the power plug,
stocks rose more than 14%, on the way to its biggest close since May 2006 and a six-day winning streak, its longest streak since October.
The stock gained 92% in the six-session period and 1,377% in the last 12 months, compared to gains of around 16% for the S&P 500 index. SPX,
It is still a long way, however, from a record high closing $ 1,497.50, reached in March 2000.
On Tuesday, Plug Power and Renault RNO,
they said they signed a memorandum of understanding to launch a 50-50 joint venture in France by the end of the first half of 2021.
The effort will combine Renault’s vehicle manufacturing capabilities with Plug Power’s fuel cell manufacturing and hydrogen systems knowledge, and position companies to become “key players” in the fuel cell industry, the companies said .
“We see this as a validation of (Plug Power’s) technical capability in electrolysers and fuel cells,” analysts at Jefferies, led by Jeffrey Osborne, said in a note on Tuesday. They reiterated their valuation of Plug Power’s shares at their purchase equivalent and increased their target price from $ 50 to $ 73.50.
“We are impressed with the company’s victory over French suppliers,” they said. “This JV gives us more confidence in our revenue expectations for Plug Power, which we forecast between ($ 200 million) and ($ 250 million) for the mobility portion of the business in the 2024 period.”
The “momentum” for stocks continues, said Jefferies analysts.
Plug Power’s shares rose last week after the company announced a $ 1.5 billion investment by SK Group in South Korea and its intention to form a joint venture with the company in Korea next year.
Plug Power’s shares had another boost on Tuesday, when analysts at Truist Securities started covering the shares with a buy rating and a target price of $ 60.
Analysts praised Plug Power’s 973% gain last year and said that while “actions are unlikely to repeat this move in 2021, we see (Plug Power) converting ‘hydrogen hype’ into concrete orders and profitability in the next three years, what we see as driving superior performance. ”
Of the 11 analysts covering Plug Power and interviewed by FactSet, only one classifies it as a wait, and 10 classifies it as a purchase with an average price target of $ 46.59.