The investor community was reminded that equities can move in both directions; Growth names such as Plug Power (PLUG) have borne the brunt, declining in recent weeks.
But according to one analyst, the massive sell-off creates a great opportunity to enter PLUG in the long run.
Taking advantage of recent market conditions, JP Morgan’s Paul Coster improved its PLUG rating from Neutral (i.e. Hold) to Overweight (i.e. Buy). Coster’s price target remains at $ 65 per share, implying a 55% hike over the next 12 months. (To look at Coster’s background, Click here)
“Against the backdrop of the company’s many long-term growth opportunities,” said Coster, “we believe the stock price is currently attractive, ahead of potential positive catalysts, which include customer gains. Additional “pedestals”, partnerships and joint ventures that allow the company to penetrate new geographies and end-market applications quickly and with a modest capital commitment.
Investors have been won over by the PLUG share over the past year because it comes with a narrative – the promise of the renewable energy sector, and more specifically, the role the company has to play in what it is. we call the hydrogen economy.
As such, Coster calls PLUG a “stock of stories, attracting thematic investors as well as generalists seeking exposure to renewable energy growth.”
Any worthy stock could act as a potential catalyst, which Coster expects the company to provide in the near term. In addition to the catalysts mentioned above, Coster believes that in the second quarter, the company will announce a “large deployment of stationary storage with a data center owner.”
Coster says he may also have underestimated the number of investment opportunities the company will seek out over the next two years. That said, the analyst remains vigilant to excess exuberance and his revised projections for 2021 and 2022 fall short of the company’s forecast, due to the “risk of executing so many initiatives simultaneously.”
Regarding the danger of growth stocks slipping further amid a “momentum to value” rotation, Coster thinks investors seem aware of these risks, but most see the company as a “competitor.” leading ”, well positioned to capture market share as the hydrogen economy grows over the next decade.
Plus, with the total addressable market expected to be in the billions, Coster says short-term lack of profitability doesn’t seem like a problem for most.
Overall, among Street analysts, there is broad agreement on the potential of PLUG. One of each Hold and Sell are topped by 11 Buys, resulting in a strong buy consensus rating. Considering the average price target of $ 62.85, the forecast is for gains of 60% over the coming year. (See the analysis of PLUG shares on TipRanks)
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Disclaimer: The opinions expressed in this article are solely those of the analyst presented. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.
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