Hydrogen Tax Credit Rules Propel Plug Power's Stock Pre-Market
Key Ideas
- New hydrogen tax credit rules issued by the Treasury Department are expected to benefit companies like Plug Power and Bloom Energy, boosting the hydrogen industry.
- Despite the challenges in developing clean hydrogen as an energy source, the new rules incentivize companies to use clean electricity or capture and store carbon emissions from production.
- JP Morgan analyst believes the new rules will accelerate Plug Power's recovery and remove financial overhang, potentially stabilizing its finances and aiding its growth.
- Analysts are cautious about PLUG stock, with a Hold consensus rating, but the company is seeking a government loan guarantee to capitalize on the changing regulatory landscape.
Plug Power's stock surged in pre-market trading following the announcement of new hydrogen tax credit rules by the Treasury Department. These rules aim to incentivize companies in the hydrogen industry to shift towards cleaner production methods, providing a significant opportunity for players like Plug Power and Bloom Energy. Clean hydrogen, while promising as an energy source, has faced challenges due to inefficiencies and high costs, primarily from using natural gas in production. The new rules encourage the use of clean electricity or carbon capture to address these issues. JP Morgan analyst views these rules positively, foreseeing a potential acceleration in Plug Power's recovery and financial stability. Despite recent financial struggles, including losses and scaling-up costs, Plug Power is seeking a government loan guarantee to strengthen its position in the market. Analyst sentiment on PLUG stock remains cautious, with a Hold consensus rating and a downward price target, reflecting uncertainties despite the new regulatory landscape.