Investors are underappreciating the growth potential of Plug Power , according to UBS. Analyst Manav Gupta initiated coverage of the hydrogen fuel cell maker with a buy rating and $26 price target, suggesting shares can jump more than 84% from Tuesday’s close, driven in part by Plug’s competitive green hydrogen offering. “We believe Plug could be a leader in hydrogen market and a one-stop shop that would provide customers with its grey hydrogen, green hydrogen, electrolyzers for green hydrogen production” and other necessities, Gupta wrote. “In our opinion, PLUG is on a higher risk, higher reward and capital-heavy growth strategy as it intends to become leading green hydrogen producer in North America.” Shares gained more than 3% before the bell. Green hydrogen is one of Plug’s most compelling offerings, putting the company on track to attain $3 billion in top-line growth by 2025, Gupta wrote. The production tax credit for clean hydrogen, which offers $3 per kilogram through the Inflation Reduction Act, is another selling point. Gupta also views the bank’s target of $5 billion in sales by 2026 as achievable given the accelerating pace of hydrogen adoption, viewing the hydrogen market alone as a $10 trillion market by 2030. Plug, he noted, is also growing faster than its peers, all while trading at a lower enterprise value-to-sales ratio. “We believe targets are achievable as the pace of adoption (especially post passage of IRA) accelerates and the focus will shift away from cash burn as the company executes,” Gupta said. Plug’s stock has tumbled 50% this year and nearly 12% since the start of the month. — CNBC’s Michael Bloom contributed reporting
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