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.”