Plug Power
and SunPower shares slid Thursday after a bull moved to the sidelines on the stocks, citing near-term uncertainty.
Plug stock was down 7.6% to $3.73 in Thursday trading.
Susquehanna analyst Biju Perincheril downgraded Plug stock to Neutral from Positive and slashed his price target to $4.50 from $9.
The downgrade comes after a challenging year for Plug. Shares of the hydrogen-technology company fell 64% in 2023, when the
S&P 500
gained about 24%.
The stock fell 40% alone on Nov. 10 when Plug’s third-quarter report included a warning over its financial position. The company said at the time that the year’s performance was hit by “unprecedented supply challenges in the hydrogen network in North America.”
In a research note, Perincheril wrote that “while we like the company’s end-to-end solutions for the hydrogen ecosystem, we move to the sidelines until there is more clarity on the financing front and more progress on the gross-margin front.”
Plug didn’t immediately respond to a request for comment on the downgrade.
Perincheril also lowered his revenue forecast for the company, partly because of Plug’s delays building green-hydrogen facilities. The analyst now expects fourth-quarter revenue of $352 million, down from $427 million; he projects fiscal 2024 and 2025 revenue of $1.6 billion and $2.5 billion, respectively, down from $1.8 billion and $3 billion, respectively.
Perincheril also downgraded shares of
SunPower
on Thursday to Neutral from Positive, and cut his price target on the stock to $4 from $5.50.
The solar market had a rough 2023, and the analyst doesn’t see the industry having its day in the sun anytime soon. In fact, he expects the segment is likely to see recent headwinds continue into at least the first half of this year before demand potentially gets better heading into 2025.
Roof solar-panel installers such as SunPower saw demand sag last year as high interest rates made financing installations more expensive. SunPower stock cratered 73% in 2023.
“SPWR’s relatively weaker financial position puts it at a disadvantage compared to peers,” Perincheril said. In a filing with the Securities and Exchange Commission in December, SunPower said it breached a credit agreement when the company delayed reporting third-quarter results, which could result in a potential default. This led to SunPower issuing a “going concern” warning.
SunPower did not immediately respond to a request for comment on the downgrade. Shares were falling 7.3% to $3.61 Thursday.
Write to Angela Palumbo at angela.palumbo@dowjones.com
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