Shares of fuel cell maker Plug Power started the week with another setback. In addition to the company’s general difficulties, this is also due to the social unrest and protests in China, which are creating a climate of caution among investors. The big question now is whether Plug Power action can hold the price’s last support zone, or if the worst is yet to come.
Various causes of bad prices
Apart from the difficult market environment, bad internal news is mainly responsible for the decline in the share price. Sales of around $900 million were actually expected for this year. But in October, it was learned that this forecast would probably be missed by 5 to 10%. Meanwhile, analysts at famed investment firm JPMorgan lowered their price target for Plug Power shares from $32 to $28.
At the so-called annual Plug Symposium, there was another disappointment a few weeks later. Hydrogen production, so important to the company, is unlikely to start as widely as expected in the coming year. Instead of the calculated 70 tons, only 50 tons can be produced per day. The announcement of a target of 200 tons per day by the end of 2023 could not change the negative reception given to this news.
With the tense situation in the world economy and the possible escalation of conflicts in China, there is now another factor. Although this does not directly affect the company, it still impacts the performance of the stock and pushes the price to new lows.
In fact, Plug Power should currently be one of the best performers on the market. After all, hydrogen stocks are hugely popular and the company’s technologies are becoming more relevant and future-proof.
Founded in 1997 and based in New York, the company is primarily involved in the development and sale of modern fuel cells. These fuel cells are used in electromobility as well as in industrial trucks and in emergency generators. Plug Power is also a major player in the hydrogen production and distribution industry, developing hydrogen storage systems for this purpose.
Chart analysis leaves room for speculation
Despite these sectors currently in demand and served by the company, the Plug Power stock has failed to gain value in recent months. On the contrary, since its last high of almost 30 euros, which it reached towards the end of August, the price has fallen by more than 50% and is currently oscillating at 14.50 euros. A slight rally in prices took the stock back above the $17 mark by the middle of this month. But that couldn’t be held.
The share price is at the antithesis of its historical record of more than 56 euros in February 2021. Currently there is only to move downwards and to hope that the support zone will resist around 14 euros. Should this fall, Plug Power’s stock could quickly decline further. Prices around the yearly low of 13.43 would then be realistic if they did not go even lower.
Although sustainable investing is all the rage right now and the sector could hardly be more sustainable, you should be careful when investing in Plug Power right now. Prices could quickly drop even further, which could make a subsequent investment more sensible. Of course, for investments with a very long investment horizon, there is already a good opportunity to get involved with Plug Power if you have confidence in the future of the company.
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