Analysts at Citi downgraded Plug Power (NASDAQ:PLUG) to a Neutral rating (from Buy) and lowered the Price Target to $5 (from $12.50), noting that PLUG management's "subpar execution has led the company into liquidity challenges."
In their latest note, they note that the company has not been able to execute on its formerly "catalyst rich story," as none of the potentially positive developments - GA commissioning, 45V clarification, H2 hubs, breakeven margins, strong sales growth - have played out.
On the contrary, the previously bullish analysts now issue a warning about PLUG's near-term liquidity issues. They estimate "~$500mm of cash is required over the next six months against line of sight to ~$930mm in liquidity," and believe "the company will need more cash latest by 3Q24."
While they see a "narrow way out of the near-term issues" with the 45V PTC (NASDAQ:PTC) clarification, which they now view not as a potential catalysts but as a "much-needed lifeline," they also note that "PLUG would need to secure some funding... to ensure existential risk is mitigated," and believe the "margin of error is small."
The analysts conclude that if unfavorable, the 45V PTC situation "could also pose insurmountable challenges," and as such estimate "risk/reward is in favor of a Neutral rating," as they downgrade the shares and lower the Price Target.
Shares of PLUG closed at $4.35 yesterday, and are down nearly 65% YTD.