Plug Power stock gains as JPMorgan sees policy clarity removing overhang

Investing.com - Plug Power (NASDAQ:PLUG) stock gained after JPMorgan issued positive comments on the hydrogen fuel cell company following a management conference call discussing U.S. hydrogen policy updates. The company's shares have shown strong momentum, surging 18.25% in the past week, though InvestingPro data indicates the stock remains down 39% over the last six months.

JPMorgan highlighted that policy clarity from the OBBB (Ownership, Buyout, Build, and Bailout) should remove an "overhang for the broader hydrogen complex" that has stalled for several years due to changing guidelines. According to InvestingPro analysis, Plug Power faces significant financial challenges with a weak overall health score and negative EBITDA of $948.9 million in the last twelve months.

The bank noted that Plug Power expects to receive credits for its current production in Georgia and potentially for Louisiana, while gaining "more flexibility around when it deploys capital" rather than rushing to meet previous eligibility cutoffs.

JPMorgan also pointed out that Plug Power's previously delayed Department of Energy loan draw for its Texas facility—which the company had attributed to tax credit uncertainty during JPMorgan's Energy Conference in late June—now has an improved outlook for progress.

The policy developments could enable some green hydrogen projects in the U.S. to progress to Final Investment Decision that "would have otherwise been canceled without the credit given significantly higher production costs than blue/grey hydrogen," according to JPMorgan. For investors seeking deeper insights, InvestingPro offers comprehensive analysis with 12 additional ProTips and a detailed research report on Plug Power's financial outlook and market position.

In other recent news, Plug Power Inc. announced a multi-year extension of its hydrogen supply agreement with an unnamed U.S.-based industrial gas company, securing liquid hydrogen supply through 2030. This agreement aims to reduce costs and improve cash flows, supporting Plug Power's applications business, which serves over 275 hydrogen-consuming customer sites. Additionally, the company held its annual meeting, where shareholders approved key proposals, including the election of three Class II directors and a reverse stock split. Amendments to the company's charter and stock option plan were also approved, while some proposals did not gain the required majority.

H.C. Wainwright reiterated its Buy rating on Plug Power, maintaining a $3.00 price target, citing potential benefits from changes to clean energy incentives in the One Big Beautiful Bill Act. The act includes modifications to tax credits that could extend benefits for Plug Power's operations. Furthermore, Plug Power's stock saw significant gains following the Senate's advancement of a tax-and-spending bill that preserved tax credits for renewable energy projects. The company continues to operate production facilities in Georgia, Tennessee, and Louisiana, with plans to launch over 40 new customer sites in 2025.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.