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Why Plug Power, Bloom Energy, and Enphase Stocks Popped Today

Why Plug Power, Bloom Energy, and Enphase Stocks Popped Today
Written by Publishing Team

What happened

heavy technology Nasdaq It recovered this morning, having officially reached a “correction” point – 10% top-down sell-off – yesterday. Green energy stocks are among the biggest gainers today, with fuel cell pioneers power plug (NASDAQ:PLUG) And Bloom Energy (NYSE: BE) Gain 8.6% and 6%, respectively.

Also moving up is the mini inverter maker for solar panels Energy Enphase (NASDAQ: ENPH), recording a gain of 5.1% as of 10:10 AM ET.

Tanker truck marked H2 Hydrogen next to a solar panel and wind turbines under a blue sky.

Image source: Getty Images.

so what

However, most of the news in the field of renewable energy today is so bad Newsletter. This morning, you can’t throw a stone at Wall Street without shocking one banker or another working to lower target prices for renewable energy stocks.

On Enphase for example, megabanker JP Morgan It just lowered its price target on the solar company leader by 15% to $246 per share, citing “challenging supply chain issues, geopolitical tensions, and [unchanged] The US Investment Tax Credit During 2021 and 2022 [which] It could potentially delay some utility-scale projects,” reports J.P. Morgan also complains that changing California’s solar regulation gives it only a ‘limited’ view of how successful Enphase will be in the near term.

Similarly at Bloom, JP Morgan is lowering expectations — cutting its target price by 16% to $32 a share, warning of near-term volatility.

However, Plug Power is catching on today the most. According to TheFly’s latest tally, at least three separate analysts – RBC Capital, Wells Fargo, And Canaccord Genity They are responding to yesterday’s plug-in 2022 revenue forecast with low price targets.

Canaccord is particularly pessimistic with its $25 price target, warning of implementation risks as the plug tries to increase its revenue stream from $31 million over the past 12 months to $900 million over the next 12 months. Wells Fargo added that Plug’s free cash flow could be sub-par, and that investors would not be willing to pay for nonprofit stocks in an era of inflation and rising interest rates.

What now

However, amid all this gloom and gloom, one stock market analyst’s rating stands out: Morgan Stanley‘s.

In her private note on Plug Power this morning, Morgan Stanley broke with the herd to announce that the sale of Plug Power shares had crossed the line. Noting that The Plug has reaffirmed its guidance for both 2022 and 2025 revenue, Morgan Stanley highlighted the potential for lower operating and capital costs from previous acquisitions, and future acquisitions in monetization technology, to increase both revenue and profits – expecting up to 250 $1 million in additional annual revenue for Plug “in the long run,” reported today.

Morgan Stanley reiterated its over-rating on Plug’s stock and its $65 price target, nearly double what anyone else would expect. In that regard, even one of the analysts who lowered price targets on the Plug today – RBC – still considered the stock a buy with a 70% rally. (The other two analysts, Canaccord and Wells Fargo, see the stock as no worse than fair price.) Similarly, JP Morgan, despite reducing its targets in Bloom and Enphase, believes that these two stocks are still undervalued despite all the uncertainties, and recommends buying them.

Too long story, why are green energy stocks soaring as a result of bad news today? Because despite the target price cut, these analysts largely view green energy stocks as a bargain — just not as big a bargain as they thought yesterday.

This article represents the opinion of the author, who may disagree with the “official” recommendation position of the Motley Fool Premium Consulting Service. We are diverse! Asking about an investment thesis — even if it’s our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.

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