Plug Power (PLUG) - Get Report rose on Wednesday after RBC analyst Joseph Spak initiated coverage on shares of the hydrogen fuel-cell technology company with an outperform rating and a one-year price target of $42.
Plug Power shares were up 1.88% at $34.72 after Spak announced his rating and price target.
“Plug Power’s valuation is rich, but its long-runway for growth justifies the premium,” Spak wrote in a research note to clients, adding that Plug “… offers exposure to the emerging hydrogen economy through its ‘comprehensive turn-key solution.’”
Spak noted that Plug Power has a substantial amount of opportunity for growth, given the Hydrogen Council’s estimates that the hydrogen economy could bring in more than $2.5 trillion in annual sales by 2050 to the immediate industries associated with hydrogen technology.
That figure could swell to as much as $4 trillion if revenue from associated products such as fuel cell electric vehicles is included, Spak said, adding that policy developments, announcements and partnerships or acquisitions could also fuel the company’s stock price.
To be sure, Plug Power still has ground to cover in terms of rebuilding credibility following its recent accounting-related issues, noted TheStreet's Jim Cramer.
Plug Power in March said it had discovered mistakes in its past earnings reports. The Latham, N.Y., company in May said it had completed the restatement of its financial statements for the past three years.
“RBC starts Plug Power with a buy… very important to rebuild credibility after accounting issues,” Cramer said in a tweet on Wednesday.