HSBC downgrades Bloom Energy after significant rally

Investing.com -- HSBC has downgraded Bloom Energy to Hold from Buy, saying in a note to clients on Thursday that while the company’s prospects remain strong, the shares have run too far, too fast.

“While we see upside in Bloom and expect consensus estimates to revise higher, we await a better entry point for the shares,” the bank said.

In its U.S. Hydrogen note following the Green Hydrogen Summit USA in Seattle, HSBC said it was raising its target prices for Bloom Energy ($100 from $44), Ballard Power Systems ($3.40 from $2), and Plug Power ($4.40 from $2.50.

The analysts added that “a new cycle has begun for the US Clean Tech sector,” driven by “falling interest rates, more realistic growth assumptions, rational government policies, and less reliance on government incentives.”

Bloom Energy shares are up around 290% year-to-date, reflecting the broader rebound in clean technology stocks.

But HSBC cautioned that, despite the improving macro backdrop, investors should be mindful of valuation after such a sharp move.

The bank’s report also captured a shift in tone across the U.S. hydrogen industry. “Seattle was sober with a recognition the world was moving ahead in hydrogen while the US was slowing down,” HSBC said, following the Trump administration’s decision to “cancel DOE funding for Blue states” and terminate financing for the two West Coast hydrogen hubs.

Nevertheless, the bank noted that “select projects are still moving forward,” highlighting progress at Plug Power, Electric Hydrogen, and CF Industries.

“We are optimistic a new cycle has begun,” HSBC said.

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