Plug Power: A Rising European Hydrogen Force

 Plug Power: A Rising European Hydrogen Force

It seems hardly a day goes by without a new announcement from Plug Power (PLUG) and Wednesday was no different.

The hydrogen specialist disclosed it has signed a memorandum of understanding (MOU) with French-based green hydrogen producer Lhyfe, which states the two companies will cooperate on hydrogen generation in Europe.

Specifically, the pair intend to develop green hydrogen plants sourced by renewable energy such as offshore wind, with the endeavor producing green H2 for on-road and off-road mobility applications. Additionally, the companies plan on working together to develop a U.S.-based offshore wind electrolyzer facility. The initiative calls for total hydrogen capacity of 300MW by 2025 and will also leverage PLUG’s electrolyzer systems to develop a 1GW production site.

Considering the size of the TAM in Europe and the intersection of offshore wind and green H2, picking up a development partner for green hydrogen production and electrolyzers is a “noteworthy” event says Evercore analyst James West, even though the benefits are a few years away.

“The initiative is not meaningful to revenues in the short or medium term (2021-2024E) but we believe it sets the stage for robust revenue growth post-2025 and should further establish the company’s foothold in one of the continent’s more renewable-friendly countries,” the analyst went on to say.

PLUG has been busy making inroads in Europe; it has already built a presence in France, Portugal, The Netherlands, and Italy, while the company’s European HQ is in Germany.

The MoU comes on the back of another collaboration between the two companies; earlier this year PLUG provided 1MW of electrolyzer capacity for Lhyfe’s offshore H2 production facility, as part of a project which will come online in 2022. Located in offshore France, the project is the first of its kind, making use of Vestas’ floating wind turbines to generate renewable power capable of utilizing electrolysis for the generation of green hydrogen.

To that end, West remains with the bulls. The Evercore analyst maintains a Buy rating and a target price of $42 on the stock. (To watch West’s track record, click here)

Most analysts agree with West’s thesis; based on 12 Buys vs. 3 Holds, PLUG stock boasts a Strong Buy consensus rating. The average price target clocks in at $43.36, implying shares have room for 14.5% growth in the year ahead. (See PLUG stock analysis on TipRanks)

To find good ideas for stocks trading at attractive valuations, visit TipRanks’ Best Stocks to Buy, a newly launched tool that unites all of TipRanks’ equity insights.

Disclaimer: The opinions expressed in this article are solely those of the featured analyst. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.

Related post