Plug Power Chases Growth Beyond US Tax Credit Hurdles

Plug Power Inc PLUG Monday reported its first-quarter results.

With U.S. policy for green energy posing challenges, the company is likely to shift its focus to international opportunities, according to JPMorgan.

The Plug Power Analyst: Analyst Bill Peterson maintained a Neutral rating and price target of 96 cents.

The Plug Power Thesis: The company reported its quarterly revenue at $134 million, in-line with its pre-announcement, and reiterated its second-quarter revenue guidance of $140 million-180 million, Peterson said in the note.

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The wide range in Plug Power's revenue guidance was due to "execution and timing on its ~$200M electrolyzer backlog," he added.

The U.S. government's House Ways and Means Committee presented a proposal to eliminate the 45V tax credit for clean hydrogen facilities starting construction after 2025, the analyst stated.

"The 45V tax credit update is likely mixed, given investor concerns around full repeal and long-term negative for green hydrogen projects in the U.S. offset by the likelihood for Plug Power to uniquely benefit from GA/TX projects," he further wrote.

New customers in Europe could help Plug Power achieve its target of 10%-20% year-on-year growth this year, Peterson said.

The company is also "executing well" on cost reduction and its cash burn could ease further over the coming quarters, he added.

PLUG Price Action: Shares of Plug Power had declined by 9.2% to $0.82 at the time of publication on Tuesday.

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