UBS Downgrades Plug Power (PLUG) to Neutral, 'Limited Near-Term Upside'

UBS analyst Manav Gupta downgraded Plug Power (NASDAQ: PLUG) from Buy to Neutral with a price target of $4.75.

"We downgrade PLUG to Neutral, as on our price target of $4.75/shr, potential upside looks limited near term. Post 3Q23, PLUG's stock was under pressure for 3 reasons: 1) liquidity concerns raised in the 10Q filing, 2) inability to start Georgia green hydrogen facility, and 3) gross margin dropping to -69%. In the past 2 weeks, PLUG has been able to alleviate some of these concerns and, as a result, its stock has rebounded from recent lows ($2.42/shr). Georgia is now online and it looks like the DOE loan is also moving ahead. Recently, management announced that, going ahead, there will be less focus on top line growth and more focus on cash management; we view this as a major positive. However, a key issue of negative gross margin is still not resolved. PLUG is struggling with negative gross margin (-69% in 3Q23) and we don’t see gross margin turning positive in 2024. We think the only way to convince long-term investors that PLUG has fixed its cash-burn problem is to provide a concrete path to positive gross margin."

For an analyst ratings summary and ratings history on Plug Power click here. For more ratings news on Plug Power click here.

Shares of Plug Power closed at $4.35 yesterday.

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