On Tuesday, Morgan Stanley (NYSE:) reaffirmed its Underweight rating on Plug Power (NASDAQ:) shares with a price target of $1.75. Analysts at the firm highlighted the potential near-term catalyst for the stock, as Plug Power might receive the final nod for its $1.7 billion loan from the Department of Energy (DOE) by January 17th.
This follows a positive Draft Environmental Assessment from the DOE’s Loan Programs Office (LPO) in early December, which was a significant step toward the final approval.
The approval, expected before the inauguration of President-elect Trump, is anticipated to mitigate the risk of the loan being retracted. This loan is considered crucial for Plug Power as it provides a low-cost funding option for the company’s capital expenditures on green hydrogen projects. Analysts predict that the stock could perform better than its peers if the final approval is granted.
Despite this potential positive development, Morgan Stanley noted that the DOE loan would not immediately solve Plug Power’s high operating losses. The company is projected to require approximately $500 million in equity financing to cover these losses through the end of 2025. The firm’s analysis suggests that while the DOE loan could offer some respite, the company’s financial challenges are far from over.
The DOE’s final decision on the loan is keenly awaited by investors, as it could influence Plug Power’s financial trajectory and stock performance. The company, which is part of the NASDAQ:PLUG, specializes in providing clean hydrogen and zero-emission fuel cell solutions. The DOE loan is expected to play a pivotal role in advancing its green hydrogen initiatives.
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