Seasoned investors probably saw it coming. In the run up to Plug Power’s (PLUG) annual symposium held last Thursday (Oct 14), shares were on a tear boosted by a double whammy of successive analysts outlying the bullish case for the hydrogen specialist and the announcement of new positive developments. While the company’s event further pressed home the opportunity for the company in the nascent hydrogen economy, investors took the opportunity to offload shares in what looked like a classic case of “buy the rumor, sell the news.”

In fact, following the symposium’s close, Oppenheimer’s Colin Rusch suggests that type of move completely misses the point.

“The scope of the hydrogen fuel opportunity appears to be well beyond what investors are expecting with the potential for 100x growth in the coming decade vs. PLUG's 2025 target of 500 MT/day,” the 5-star analyst opined.

This is based on the company’s ecosystem approach, utilizing its PEM electrolyzer technology and “working with partners across the hydrogen supply chain” to rapidly scale hydrogen production. As such, from one facility producing 70 tons/day this year, by 2025 this will get to 13 facilities producing 500 tons.

But that’s just one of the positive takeaways. The company also announced a 50-50 joint venture with Fortescue Future Industries to build an electrolyzer factory in Australia, while from its partnership with the Renault Group, the company revealed the prototype for its fuel cell-powered van, HyVia. Hyvia deliveries are anticipated to begin in next year’s first half.

By 2025, the company’s plans call for its material handling business to double – from approximately 60,000 units currently “deployed across” 200 sites. And while PLUG made no mention of its FY21 guidance, it raised its FY22 revenue guidance from $750 million to $825–850 million — well above consensus estimats of$760 million.

Apart from the huge hydrogen fuel opportunity, there are other reasons why this “comprehensive strategy for enabling the hydrogen economy,” is destined for success.

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“First, PLUG is leveraging its advantaged core fuel cell and electrolyzer expertise and accelerated scaling to enable cost-effective applications in nearly every area of the global power and transportation markets,” Rusch said. “Second, we believe in a zero-emissions economy powered by renewables; hydrogen will play the crucial role of being the backbone for the power infrastructure while enabling heavy-duty trucking and high horsepower vehicles and potentially additional segments.”

Accordingly, the analyst reiterated an Outperform (i.e. Buy) rating, backed by a $62 price target. The implication for investors? Upside of a strong 89%. (To watch Rusch’s track record, click here)

Over the past 3 months, 15 analysts have thrown the hat in with a PLUG review; among these, 3 say Hold while all the rest are to Buy, resulting in a stock with a Strong Buy consensus rating. The projected gains might not be in the same league as Rusch’s, yet at $42.86, the average price target is still set to generate returns of ~30% in the coming months. (See PLUG stock analysis on TipRanks)

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Disclaimer: The opinions expressed in this article are solely those of the featured analyst. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.

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