Plug Power Inc (NASDAQ:PLUG) shares surged another 8% on Wednesday after doubling in only six days. Other fuel cell stocks also jumped, including Ballard Power. News about a partnership between Plug Power and European automaker Renault for hydrogen-powered vans pushed fuel cell stocks higher.
Deal-making in the fuel cell business
Renault and Plug Power agreed to a 50/50 joint venture for hydrogen fuel cell-based vehicle systems. The joint venture will work on a fuel-cell stack and system manufacturing center in France that will be integrated into platforms for light commercial vehicles. Deployments of the light commercial vehicles running on fuel cells will start this year in Europe.
Jefferies analysts praised the joint venture between the two companies, describing it as a “validation” of Plug Power’s “technical ability in both electrolyzers and fuel cells.” They also said they were impressed that Plug Power won the deal over French vendors.
H.C. Wainwright analysts issued a new Street-high price target for the company, raising their target from $60 to $85, according to Benzinga. Amit Dayal said the joint venture with Renault enables the company to capture 30% of Europe’s fuel cell-powered light commercial vehicle market. He estimates that the venture will contribute about $10 million in revenue for PLUG as early as next year.
PLUG shares also climbed last week after the company announced that South Korea’s SK Group had invested $1.5 billion. The two firms also plan to create their own joint venture by next year.
ETFs with exposure to Plug Power
Many exchange-traded funds have exposure to PLUG and other fuel cell stocks. According to ETF.com, more than 60 ETFs traded on the U.S. markets have a position in Plug Power. The biggest ETF holder of the company’s stock is the iShares Russell 2000 ETF, which holds almost 9 million shares.
The ETF with the largest allocation to the company is the Global X CleanTech ETF, with a 7.88% portfolio weight. Other exchange-traded funds with sizable weightings toward Plug Power include the ALPS Clean Energy ETF, Invesco DWA Industrials Momentum ETF, iShares Global Clean Energy ETF, and First Trust NASDAQ Clean Edge Green Energy ETF. The average ETF with a position in Plug Power allocates 1.22% of their portfolios to the company.
The best-performing exchange-traded funds that hold PLUG are the iShares Global Clean Energy ETF, the Global X CleanTech ETF, the SPDR S&P Kensho Clean Power ETF, ProShares UltraPro Russell2000 ETF, and Invesco WilderHill Clean Energy ETF.
Disclosure: I do not hold positions in any of the securities mentioned in this article.
