Plug Power (NASDAQ:PLUG) rose Thursday. Citi initiated coverage of the firm with a buy rating, saying it could become one of the largest green hydrogen suppliers in the world.
PLUG will achieve positive gross margin this year with a goal to exceed 30% in gross margin by 2026, and its aggressive growth plans and substantial operating leverage should allow strong margin expansion, Citi's Vikram Bagri said.
Citi "conservatively" modeled revenues of $4.4 Billion in 2026 and ~$10 Billion in 2030, also noting 5 GW/year of electrolyzer shipments in 2030 would imply a 12%-15% market share for Plug in the U.S. and European Union combined, which the analyst said looks achievable.
PLUG had a fabulous month of June, gaining more than 20% and rebounding from a miserable May that saw shares slide to their lowest since August 2020.
This month's biggest spark followed Plug's analyst day , which highlighted the company's ramp to 100 MW/month of production, increased revenue diversification and a path to positive operational cash flow.
Several analysts followed with positive updates, including a price target increase to $12 at Truist and Outperform ratings reiterated by Oppenheimer and RBC Capital.
In June, Plug Power won part of a $21.8-million grant to help build a green hydrogen plant off the coast of Europe. The company is one of nine in a consortium called Hydrogen Offshore Production Europe. Its contribution will be a 10 MW proton exchange membrane (PEM) electrolyzer, separating hydrogen from oxygen.
PLUG shares gave up 72 cents, or 6.8%, to $9.92.
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