JPMorgan Bullish On FuelCell Energy's Positioning In Clean Energy Shift

FuelCell Energy Inc FCEL has recently strengthened its balance sheet and seems poised to return to profitability “by converting project backlog into recurring revenues,” according to JPMorgan.

The FuelCell Energy Analyst: Paul Coster initiated coverage of FuelCell Energy with an Overweight rating and $3 price target. 

The FuelCell Energy Thesis: The company’s growth will be driven by the shift toward clean, sustainable energy; grid resilience; and lower carbon dioxide emissions, Coster said in a Thursday initiation note. 

FuelCell Energy is well-positioned to generate robust long-term growth from the “accelerating adoption of distributed generation solutions and early-stage adoption of carbon capture and hydrogen-based energy storage solutions,” the analyst said. 

The company has more than $1.3 billion in project backlogs and nearly 50 megawatts of projects, and targets a market valued at over $170 billion, with more than 20 gigawatts of capacity, he said. 

“With funds necessary to execute on its backlog, FCEL is poised to double its generating portfolio, grow revenues at well over 10%, and post adjusted EBITDA profit and positive cash flows by 2022.”

Major projects with Exxon Mobil Corporation XOM and Toyota Motor Corp TM are near-term catalysts for FuelCell Energy, according to JPMorgan. 

FCEL Price Action: Shares of FuelCell Energy were rallying by 10.19% to $2.38 at last check Thursday.