Friday, TD Cowen affirmed its confidence in Plug Power shares (NASDAQ:PLUG) but adjusted its price expectations, reducing the stock's price target to $5 from $7 while maintaining a Buy rating. The revision follows Plug Power's first-quarter financial performance, which revealed challenges including decreased volumes and gross margins in the equipment business.
The company's hydrogen generation network development remains on schedule, aiming to achieve 40 tons of capacity by the end of 2024. Despite the setbacks in the first quarter, Plug Power's management successfully implemented a price increase of 10% to 15% for its customers, a strategic move intended to improve profit margins.
TD Cowen noted that Plug Power is initiating cost reduction efforts, which are expected to be more evident in the second quarter results. These initiatives are seen as a positive step towards mitigating the impact of the lower financial results experienced in the first quarter of 2024.
In summary, while Plug Power has encountered some headwinds with its equipment business, the company is taking actionable steps to address these issues. The analyst's revised stock price target reflects a tempered but still optimistic view of the company's potential to recover and grow in the forthcoming quarters.
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