Shares in Plug Power (PLUG) spiked 16% in Tuesday’s trading after the company announced that it has completed the acquisitions of United Hydrogen Group and Giner ELX. Shares continued to rise 2% in after-hours trading. The stock has now more than doubled year-to-date.
According to PLUG, these acquisitions boost its position in the hydrogen industry with capabilities in generation, liquefaction and distribution of hydrogen fuel- and establishs a clear pathway to transition from low-carbon to zero-carbon hydrogen solutions.
With the acquisitions now complete, fuel cell maker Plug Power also boosted its 2024 financial targets to $1.2 billion in revenue (from $1 billion), $210 in operating income (vs $170 million), and $250 million in Adjusted EBITDA (up from $200 million previously).
To Plug, the new guidance reflects the “significant margin enhancement potential in the hydrogen fuels business and the expected global growth of the electrolyzer market while meeting increased customer focus on sustainability and carbon reduction goals.”
Indeed, Plug Power is focused on becoming one of the largest green hydrogen generation companies in the United States over the next five years and later, in the world.
The company projects that its existing customers will use almost 100 tons of hydrogen per day by 2024 and expects over 50% of that to be green hydrogen. According to Bloomberg New Energy Finance, the cost of green hydrogen is set to decline over 50% by 2030 and will be at parity with traditional ways of producing hydrogen today.
United Hydrogen is one of the largest privately held merchant hydrogen producers in North America with capability to produce 6.4 tons of hydrogen each day. The company plans to increase that to 10 tons daily in the near future, as well as plans for further expansion.
Meanwhile Giner ELX boasts one of the world’s largest, most efficient and cost-effective PEM hydrogen generators; grid-level renewable energy storage solutions, and on-site hydrogen generation systems for fuel cell vehicle refueling stations and industrial uses. Giner ELX also has a strong sales channel in the European market.
“Plug Power is working to build the modern clean hydrogen economy,” cheered Plug CEO, Andy Marsh. “This closely aligns with the efforts that companies like United Hydrogen and Giner ELX have made to secure broad participation in the hydrogen economy, and to achieve the objectives of a clean environment and reduced dependence on foreign oil.”
Overall PLUG scores a bullish Strong Buy Street consensus with 5 recent buy ratings and just 1 hold rating. However due to the recent rally the average analyst price target of $6.40 is now in-line with the current share price. (See PLUG stock analysis on TipRanks).
“PLUG [is an] early leader in commercialization of fuel cell mobility applications, where strong momentum is building” commented B Riley’s Christopher Souther earlier this month as he resumed coverage with a buy rating.
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