FuelCell Drops as J.P. Morgan Cuts Stock to Sell on Valuation

FuelCell was cut to sell at J.P. Morgan on valuation. The stock had more than quadrupled in 2020. And in 2021 through Wednesday it had risen 71%.
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Shares of power equipment maker FuelCell Energy  (FCEL) - Get Report dropped Thursday after JPMorgan analyst Paul Coster downgraded the stock to the equivalent of sell.

Coster has a $10 price target on the Danbury, Conn., company. FuelCell shares at last check dropped 11% to $17.01. 

The stock had more than quadrupled in 2020. And in 2021 through Wednesday it had risen 71%. "We think the stock is richly valued here," Coster said. 

In the same note, Coster initiated coverage of peer hydrogen fuel cell maker Plug Power  (PLUG) - Get Report with a hold rating and a $60 price target. 

That also indicates downside: Plug Power recently traded at $65.69, down 5.5%.

J.P Morgan also sees Plug as overvalued since the stock jumped by more than a factor of 10 in 2020 and has doubled this year.

Last week, South Korean conglomerate SK Group said it would invest $1.5 billion in Plug Power, with SK receiving 51.4 million PLUG shares at $29.29 each.

On Tuesday, Plug Power and French carmaker Renault  (RNLSY)  unveiled a joint venture for hydrogen-powered vans in Europe.

The joint venture in 2021 will start commercializing fuel-cell light commercial vehicles in Europe with pilot fleet deployments.

These recent partnerships, Coster said, "give us confidence in the 2024 targets of $1.2 billion sales [and] $250 million in adjusted Ebitda."