The U.S. Energy Department plans to offer up to $4B in loan guarantees to renewable energy projects, focusing on advanced electric grid technology and storage, biofuels that can be used in conventional vehicles, energy from waste products and energy efficiency improvements.
Despite the high-profile collapse of Solyndra, the Obama administration believes most of its energy investments have done well, and it credits the program with strengthening the U.S. solar industry.
Early gains in Ballard Power (BLDP +0.7%) are fading, as Cowen starts coverage of BLDP at Market Perform with a price target of $3.75, slightly below the stock's close at $3.93 last week, as the firm notes some key positives.
BLDP and Volkswagen have a multi-year contract which might be good for C$60M-C$110M in revenue, and a partnership with Anglo American Platinum targets developing home generators for South Africa.
Cowen is looking for a FY 2014 loss of $0.07/share and a 2015 loss of $0.01/share, while seeing respective '14 and '15 revenue of $80M and $97.5M.
After early gains, other alternative energy stocks are mixed: PLUG +1%, FCEL -0.8%, HYGS -3%, ZBB -1.1%.
Plug Power (PLUG +3%) CEO Andrew Marsh tells Bloomberg the company is discussing plans to expand fuel cell usage into different areas, such as airport support vehicles and refrigerated tucks, while expanding its presence with trucks and forklifts.
Growing demand for cleaner forklifts has helped boost PLUG shares more than 1,000% in the past six months, and the company expects orders to almost quadruple this year to ~$150M, but Marsh says forklifts are only a niche to sustain the company; now the CEO wants to expand into new areas where fuel cells can compete with electricity from fossil fuels.
Other alternative energy names are getting a moderate lift: BLDP +2.4%, FCEL +1.1%.
GE engineering chief Vlatko Vlatkovic says the company has studied fuel cell technology and sees only a limited, niche product: "It’s almost impossible to do a good fuel cell without platinum as a catalyst... Very little goes in, but if you scale it up, there’s not enough platinum in the world."
Battery names were mostly higher in today's trade: FCEL +0.8%, PLUG +6.8%, BLDP +5%, ZBB -3.1%.
Marsh also expects another GenKey deal similar to the one with Wal-Mart sometime this year; shares have whiplashed since announcement of a contract to supply fuel cell units to Wal-Mart in late February and a Citron Research piece that said PLUG would be fairly valued at 50 cents.
PLUG already was moving higher from a positive article by Value Investor Right Now, which outlines a case for why shares are headed to $14.
Other battery names are higher too: BLDP +16.7%, FCEL +10.7%, ZBB +9.8%.
Trading in Plug Power (PLUG -8.2%) triggered a securities short-sale circuit breaker earlier this afternoon after shares dropped as much as 9% and more than 17% so far this week following big gains in previous weeks.
PLUG shares opened strong yesterday but faded after Volkswagen shot down rumors of a deal between the two companies.
CNN's Kevin Kelleher worries PLUG is more than just another classic speculative rally run amok - it is a symptom of an increasingly erratic market suggesting not just a tolerance toward but also a growing appetite for deals that can't be rationalized.
Ballard Power Systems (BLDP), which provides fuel cell stacks to PLUG equipment, -7.5%.
High-flying fuel cell names are sputtering after two research firms downgraded Plug Power (PLUG -5.4%) earlier today; FuelCell Energy (FCEL -6.7%) and Ballard Power (BLDP -0.6%) also are lower.
Roth Capital thinks bookings still appear set to grow at a rate that exceeds historic levels, but much of that growth is already reflected in the stock; the firm also warns that some of PLUG's shipments could be delayed because most of its products are being shipped to customers that still have to add hydrogen infrastructure, which could take longer than expected.
Cowen mentioned that the broader segment was getting a little rich: "Fuel cell and hydrogen-related companies are trading in a range of 2.9-8.2x EV/2015E sales... PLUG is at the high end, consistent with 2015E sales growth of 100% (vs. 19-39% for peers)."
Plug Power (PLUG) +8.9% premarket after issuing Q4 results that beat revenue estimates and predicting orders will rise more than fourfold this year to more than $150M.
Unadjusted net loss widened to $28.9M from $8.47M in the year-ago quarter, mainly because of a $20M charge related to a change in the fair value of previously issued common stock warrants.
Bookings reached $32M in the quarter, as strong product sales and maintenance orders were received from large companies such as Wal-Mart, Kroger, BMW and Mercedes-Benz; shipments fell 46% Y/Y to 279 units.
“I am more bullish than ever that Plug Power is moving into a rapid growth cycle,” CEO Andy Marsh says, expecting EBITDA to break even by Q3.
Shorts against the share prices of red-hot fuel cell manufacturers are climbing as questions emerge about the prospects for profits.
Plug Power’s (PLUG +11.4%) short interest reached a two-and-a-half-year high of 10.6% of shares outstanding on March 10, up from 2.4% in September; shorts in FuelCell Energy (FCEL +1.8%) reached 14.2% yesterday vs. 4% in June; and Ballard Power (BLDP +1.7%) surged to a record 3% from 0.2% in October.
PLUG plunged yesterday after short-seller Andrew Left said in a report that the shares are worth 50 cents, and Left adds another criticism today, saying PLUG will be threatened if larger companies move into its market, such as Toyota (TM), which plans to release a fuel-cell sedan next year.
"If fuel cells become standard in fork lifts, Toyota is ready to step in,” Left says today. "If hydrogen becomes the fuel of the future, then Wal-Mart will take the cheapest supplier.”
Cowen's Robert Stone, who downgraded FCEL today, counters that PLUG dominates the market in fuel cells for material handling and has more than 100 patents that will help protect its advantage should additional suppliers enter the market.
FuelCell Energy (FCEL -3.6%) is downgraded to Market Perform from Outperform but with a new $2.70 price target, up from $2, at Cowen, which says recently completed fuel cell parks in Connecticut and Korea should open a $12B opportunity, and H1 orders should drive FY 2014 and Q4 revenue and gross margins to EBITDA break-even.
The firm is eyeing a back-half 2014 weighting to shipments, with a higher mix of full power plant projects vs. kit sales helping lift revenue to ~$68M in Q4 vs. $44M in Q1, and lift gross margin to 12% from 4.9%; in addition to volume, production cost improvements include process upgrades such as automated laser welding.
The collapse in Plug Power (PLUG -40.8%) has pulled down other alternative fuel shares, as investors turned away from FuelCell Energy's (FCEL -21.6%) better than expected Q4 results to focus on Citron Research's report that said PLUG would be fairly valued at 50 cents.
Citron's Andrew Left has since taken to the CNBC airwaves to say PLUG has no unique technology and PLUG's management cannot be trusted.
Ballard Power (BLDP -26.6%), which earned 11% of its revenue last year by supplying the fuel cell stacks that run PLUG’s forklifts, also takes a beating.
FuelCell Energy's (FCEL) FQ1 results aren't slowing down the recent buying frenzy in its shares, +16.8% premarket after revenue jumped 22% Y/Y and losses narrowed amid growing demand for multi-megawatt fuel cell parks.
Inquiries and activity levels globally remain high, FCEL says, and the company is on track to close orders worth multiple megawatts of power capacity.
Backlog totaled $327M at Jan. 31, 2014 vs. $428M a year ago.
No FQ2 guidance is provided; consensus estimates for the quarter are an EPS loss of $0.03 on sales of $48.8M.
Alternative energy stocks continue to rise at a torrid pace: PLUG +9.5%, BLDP +11.7%, HYGS +5.1%, ZBB +18.8%, CPST +13.2%, OPTT +9.9% premarket.