Not the hydrogen economy game you’re looking for
As with many growth sectors, the new energy segment has recently taken a beating. And while some would say the decline is an opportunity to stock up on stocks at rock-bottom prices, Wells Fargo Praneeth satish recommends otherwise when reviewing FuelCell Energy (FCEL) perspectives.
In fact, even after FCEL shares fell 67% from mid-February highs, Satish believes it is difficult for the company to justify its current position in the market.
To that end, Satish initiated a hedge of FuelCell with an underweight (i.e. sell) rating and a price target of $ 9. (To look at Satish’s record, Click here)
FuelCell is part of the nascent hydrogen economy, an industry that is still in its infancy and is expected to experience significant growth over the next few years. As such, Satish presented the most bullish and bearish scenarios for the company.
As for the upside potential, if after commercialization, FCEL’s carbon capture business achieves high speed growth and the stationary power hydrogen market grows faster than predicted, Satish thinks the stock could be worth $ 17 per share, with revenue growth. at a CAGR (compound annual growth rate) of 42% over the next 10 years.
On the other end of the spectrum, if FCEL’s new products such as the solid oxide platform and carbon capture fail commercially, and the company’s distributed carbonate production business continues to be its only one. reliable source of income, Satish expects the shares to be worth $ 3 a. piece, with revenues increasing at a CAGR of 22% over the next decade.
Ultimately, however, Satish FCEL’s base model projects will increase over the same period at a CAGR of 32%. And while this estimate calls for “continued growth in FCEL’s established carbonate fuel cell business and commercial success in FCEL technologies under development,” this scenario is not enough to convince Satish that FCEL represents. a wise investment.
“While the company should benefit in the coming years from the commercialization of a new solid oxide fuel cell product and carbon capture opportunities,” the analyst summed up, “we are struggling to see a probable scenario in which FCEL could develop in its valuation. “
Overall, Street’s current assessment of FCEL presents an interesting conundrum. While 4 takes and 2 sell adds to a moderate sell consensus score, the average price target of $ 10.63 implies an increase of about 14% from current levels. (See FCEL stock market analysis on TipRanks)
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Disclaimer: The opinions expressed in this article are solely those of the analyst presented. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.