Why Plug Power Stock Jumped 5% and Then Dropped Today
Hydrogen fuel cell company Plug Power's (NASDAQ: PLUG) share price popped by 5.1% as of 9:48 a.m. ET Wednesday morning, then gave up all of those gains and then some as concerns about rising competition countered the impact of an analyst's upgrade. As of 1 p.m. ET, Plug Power was trading down by 2.3% at around $42.10 a share.
On Wednesday morning, Citi analyst P.J. Juvekar initiated a pair trade on two fuel cell stocks, going long Plug Power and short Ballard Power (NASDAQ: BLDP). In other words, Juvekar bought Plug Power stock expecting it to rise in value while shorting Ballard Power in anticipation that its stock price would fall.
Accordingly, Juvekar raised his price target on Plug Power stock to $56 a share from $35 per share, citing catalysts that include rising fuel gross margins and the expected ramp-up of Plug Power's green hydrogen network in the second half of 2022. Juvekar believes Plug Power is better poised than Ballard Power to succeed, given its presence in fuel cells, hydrogen, and electrolyzers. Ballard Power, in comparison, is primarily a fuel cell player. Juvekar set a price target of $19 a share on that stock.
Source Fool.com
