Plug Power (NASDAQ:PLUG) announced an expanded partnership with Uline on Friday that will see PLUG's hydrogen infrastructure and fuel cell solutions deployed at Uline's campus in Kenosha, Wisconsin.
The company stated that the expanded partnership includes the integration of on-site hydrogen infrastructure with the installation of an 18,000-gallon hydrogen storage tank and 17 hydrogen dispensers to service four distribution centers within the campus.
It also incorporates the addition of 250 fuel cell forklifts that will operate on hydrogen generated on-site through Plug's state-of-the-art infrastructure.
Reacting to the news, analysts at RBC Capital said that despite the higher costs to the customer, hydrogen fuel cells are still preferred over battery alternatives, and "this highlights the high economic value of hydrogen in certain applications."
Importantly, Plug indicated that the Georgia plant margins are positive and approaching company-wide gross margin targets and it is also expected to produce positive cash flow in 2024," the analysts added. "PLUG expects the project to have positive margins, approaching its total company gross margin target, and will produce positive cash flow in 2024."
The analysts maintained a $3.50 price target on PLUG shares.