Hydrogen fuel innovator Bloom Energy jumped Tuesday after an analyst upgrade. The green energy stock also got a price target hike, guiding expectations to a 60% advance in the coming year.
Morgan Stanley upgraded Bloom to overweight, from equal weight. Several factors fed into the change. Bloom's modular, distributed fuel cell generators, which it calls Bloom Servers, are part of what Morgan Stanley analyst Stephen Byrd sees as an economic wedge in the developing U.S. power distribution scheme.
Increased instability and capacity limitations in the traditional also factor into Bloom's value proposition, according to Byrd. So do federal hydrogen tax credits, part of the green energy incentives included in the recent Inflation Reduction Act.
Bloom counts among its customers Home Depot, Verizon, Morgan Stanley, Target and IBM.
Expanded Green Energy Facility Boosts Outlook
Bloom christened the $200 million expansion of its Fremont, Calif., manufacturing and power production plant in July. Byrd sees the plant adding leverage to the company's outlook across 2023. Bloom also manufactures electrolyzers, which convert water into hydrogen fuel.
Byrd raised his 12-month price target on Bloom stock to 35, more than 60% above where shares traded on Tuesday.
The stock jumped nearly 9% in afternoon trade.
Bloom shares have been mired in consolidations since February 2021. Its annual revenue has climbed from around $376 million in 2016 to projections for more than $1.1 billion this year and $1.4 billion for 2023. Profits have been less forthcoming, but losses have consistently narrowed, heading for an estimated a 55 cent-per-share loss this year. The San Jose, Calif.-based company is projected to turn profitable in 2023.