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- Investing in the fuel cell sector seems timely after falling 60% in 2021, KeyBanc analysts say in a generally glowing new analysis, but the top stocks in the group are posting broad losses today.
- KeyBanc rates Plug Power (PLUG-4.3%) and Bloom Energy (BE-4.6%) at Overweight on their strong financial positions and customer relationships as well as expectations of solid revenue growth over the next few years, but the stocks are only adding to their sizeable losses racked up since early November.
- Plug Power is the dominant player in the business with ~90% market share globally and is poised to expand its global reach, KeyBanc's Leo Mariani says, as Europe, South Korea and Australia are focused on making hydrogen an integral part of their energy futures.
- FuelCell Energy (FCEL-7%) and Ballard Power (BLDP-2.3%) are launched with Sector Weight ratings, as Mariani cites smaller near-term growth prospects in absolute revenues, with Ballard boasting a higher valuation relative to peers.
- Overall, KeyBanc believes fuel cell companies offer high potential revenue growth this decade from a rapidly growing market, aided by favorable government policies and subsidies and major private sector investment.
- Hydrogen and fuel cells are not economic today, but the sector likely will see production cuts fall dramatically during this decade and eventually become competitive, KeyBanc says.
- Seeking Alpha contributor Giesbers Investment Strategy says Plug Power's nearly 2,000% gain over the last five years shows the strong momentum of the hydrogen market, and believes the company "smells like an early-stage Tesla."