In a research report published Friday, Roth Capital analyst Craig Irwin reiterated a Buy rating on shares of FuelCell Energy Inc (NASDAQ:FCEL), with a price target of $12, following the announcement that FuelCell and Exxon (NYSE:XOM) are tightening an existing relationship to make the carbon-reducing technology an economically realistic option for the world’s power plants and other major emitting facilities.
Irwin commented, “Technology agreement with XOM to pursue carbon capture with FuelCell Energy’s molten carbonate fuel cell technology raises confidence in the longer-term commercial potential. Our checks show there are eleven plants the DOE is looking to fund as a follow-on for its initial project it started with FCE in 2015, which could drive $100m+ in total orders. Successful demonstration of the technology in partnership with XOM over the next few years would be a significant positive, in our opinion.”
“FuelCell Energy has been working the past two years to understand the integration synergies and benefits of carbonate fuel cells and natural gas fired power plants vs. conventional scrubber capture technology. FCE estimates MC fuel cells can save up to 1/3 of the cost on a gas-fired power plant vs. conventional separation technology. The primary benefit of using MC fuel cells for carbon capture is the systems are expected to increase the electrical output of a plant, while conventional technology results in a proportionate decrease in plant output,” the analyst continued.
According to TipRanks.com, which measures analysts’ and bloggers’ success rate based on how their calls perform, analyst Craig Irwin has a yearly average return of -10.5% and a 33% success rate. Irwin has a -12% average return when recommending FCEL, and is ranked #3715 out of 3899 analysts.