Plug Power Stock Is Plunging: What's Going On?

Plug Power Inc PLUG shares are trading lower Monday. The stock appears to be reacting negatively to cautious analyst coverage. 

What To Know: Plug shares are making new 52-week lows on Monday following a price target cut from Truist Securities on Friday. 

Truist analyst Jordan Levy reiterated a Hold rating and lowered the price target from $9 to $8 ahead of the company's upcoming symposium on Oct. 11. The analyst's updated estimates reflect more moderate sequential growth in the third quarter due to production timing in the second half of the year and electrolyzer shipments more weighted for the fourth quarter. 

"While we continue to see a meaningful step-up in financial performance, we believe street ests for 2H23 GMs are too high, and see potential for further delays to PTC guidance amidst the threat of a gov't shutdown impacting timing on PLUG's financing efforts," Levy said in a new note to clients. 

The analyst believes Plug remains a "show me story" and noted that he expects gross margins to continue to come under pressure from the fuel segment.

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Last quarter, Plug said final commissioning activities were underway at its green hydrogen plant in Georgia.

"As Georgia produces at its full capacity, this is expected to cut our fuel margin loss by as much as half from Q2 to Q4 2023," the company said. 

What Else Is Going On: Plug shares also appear to be facing additional selling pressure due to a breakdown in technical support. 

Plug fell through support at $7.40 Monday morning and continues to reject the eight-day exponential moving average. The stock now appears to be trading in a confirmed downtrend. 

Check Out More Technical Analysis Here

PLUG Price Action: Plug Power shares were down 7.89% at $7.01 at the time of publication, according to Benzinga Pro.

Photo: courtesy of Plug Power.