By Claudia Assis
A deal with French car maker Groupe Renault has sent shares of Plug Power Inc. to their highest in 15 years, with one analyst calling the potential joint venture "transformative" for the U.S. company.
Plug Power (PLUG) shares rose more than 3% on Wednesday, on track for their highest close October 2005 and on a seven-day winning run.
The stock has more than doubled over the seven-session stretch, and gained 1,377% in the past 12 months, compared with gains around 16% for the S&P 500 index. It is still a far cry, however, from a record closing high of $1,497.50 hit on March 2000.
On Tuesday, Plug Power and Renault said they had signed a memorandum of understanding to launch a 50-50 joint venture in France (the end of the first half of 2021.
The effort will combine the vehicle manufacturing capabilities of Renault with the fuel cell and hydrogen system manufacturing knowledge of Plug Power, and position the companies to become "key players" in the fuel-cell industry, the companies said.
"We see this as a validation of (Plug Power's) technical ability in both electrolyzers and fuel cells," analysts at Jefferies, led by Jeffrey Osborne, said in a note Tuesday. They reiterated their rating on Plug Power stock at their equivalent of buy and increased their price target to $73.50, from $50.
" We are impressed the company secured this win versus French vendors," they said. "This JV gives us further confidence in our revenue expectations for Plug Power, which we anticipate to be between ($200 million) and ($250 million) for the mobility part of the business in the 2024 timeframe."
"Momentum" for the stock continues, the Jefferies analysts said.
Plug Power shares rallied last week after the company announced a $1.5 billion investment from South Korea's SK Group () and the intention to form a joint venture with the company in Korea by next year.
Plug Power shares got another boost on Tuesday as analysts with Truist Securities started covering the stock at a buy rating and a $60 price target.
The analysts praised Plug Power's 973% gain last year and said that while it is "unlikely the shares repeat this move in 2021, we see (Plug Power) converting 'hydrogen hype' into concrete orders and profitability over the next three years, which we see driving further outperformance."
B. Riley Securities analyst Christopher Souther on Wednesday boosted his price target on Plug Power to $79 from $52, (his buy rating. The Renault agreement was "a significant positive for the company in providing a strong partner to build out local manufacturing, hydrogen infrastructure, and R&D for within the European continent," he said in a note.
Of the 11 analysts covering Plug Power and surveyed by FactSet, only one rates it a hold, at 10 rate it a buy with an average price target of $54.41.
-Claudia Assis; 415-439-6400; AskNewswires@dowjones.com
(END) Dow Jones Newswires
January 13, 2021 11:04 ET (16:04 GMT)
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