Why Plug Power Stock Went Nowhere Despite a ‘Buy’ Call

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Plug Power's fuel-cell stack.

Courtesy of Plug Power

Most of the time, a banal arsenic volatile arsenic Plug Power volition emergence successful effect to an upbeat telephone from a large broker. But shares of the hydrogen-technology institution fell contempt a caller Buy standing from Citigroup expert P.J. Juvekar.

Juvekar launched sum with a terms people of $35, good supra the existent level. Two factors—one cardinal and the different little so—might beryllium astatine play.

Make nary mistake, Plug (ticker: PLUG) banal is volatile. At $26.63, shares are down 65% from their January 52-week precocious of much than $75 a share, but up 277% from their July 2020 52-week of $7.04 a share. The banal is down much than 20% implicit the past month.

Holding Plug banal is an adventure. The shares were down 2.3% successful precocious trading Friday. The S&P 500 and Dow Jones Industrial Average, for comparison, were up 1% and 0.6%, respectively.

Citi’s level of enthusiasm can’t beryllium blamed for the weakness. Juvekar wrote successful his study that the hydrogen economy is connected the cusp of a breakout. Plug makes fuel-cell exertion that generates energy from hydrogen gas. It besides plans to marque instrumentality that produces hydrogen by passing energy done water.

Juvekar likes some that vertically integrated strategy, making the substance and the instrumentality that uses it, and the company’s equilibrium sheet. Plug has astir $4 cardinal successful currency disposable to invest.

It’s a bullish call, but not an out-of-consensus one. That is the archetypal occupation for the stock. Overall, 65% of analysts covering Plug banal complaint shares astatine Buy, portion the average Buy-rating ratio for stocks successful the S&P is astir 55%. And the mean target price among analysts is much than $43 a share, higher than Juvekar’s prediction.

The bottommost enactment is that his appraisal whitethorn not person made investors immoderate much bullish than they already were.

The different occupation for Plug’s banal mightiness beryllium that it is simply a Friday, successful the summer. Investors aren’t are tuned into the markets arsenic they often are.

Plug banal was connected gait to commercialized astir 13 cardinal shares Friday, little than fractional of its mean measurement of astir 28 cardinal shares during the 2nd quarter. On an mean day, trading measurement wouldn’t beryllium little than 50% of the mean for the spring.

Low trading measurement tin effect successful unexpected outcomes from clip to time. Maybe the banal volition respond connected Monday, erstwhile traders get backmost from the beach.

Write to Al Root astatine allen.root@dowjones.com

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