FCEL Stock: JPMorgan Downgrades From Overweight To Neutral

By Amit Chowdhry ● Nov 20, 2020
  • The stock price of FuelCell Energy Inc (NASDAQ: FCEL) has increased 106.19% over the past week as it went from $2.60 per share to $5.36. But JPMorgan has downgraded the stock from Overweight to Neutral. These are the details.

The stock price of fuel cell power company FuelCell Energy Inc (NASDAQ: FCEL) has increased 106.19% over the past week as it went from $2.60 per share to $5.36. The jump in the stock price was largely driven by several announcements in the electric vehicle industry, including the better-than-expected quarterly results for the China-based electric vehicle companies Xpeng, Nio, and Li Auto; the addition of Tesla Motors to the S&P 500; and the ongoing Nikola and GM talks. 

On Thursday, November 19, JPMorgan analyst Paul Coster had backed away from a bullish call due to a dramatic move in the stock price in such a short period of time. Specifically, Coster downgraded FCEL stock to neutral from overweight based on valuation. This report seemed to have slightly decelerated the momentum of FCEL trading yesterday, but it still closed up 5.1%. 

“The stock is up ~135% over the last month (S&P 500 up 3.4%), buoyed initially by a wave of regional ‘climate ambition’ initiatives associated with Hydrogen and Fuel Cells, but also owing to a re-rating of the Alt Energy stocks on the back of the Biden election victory. The more dramatic ~80% move over the last 3 days seems to be taking place in absence of new news,” wrote Coster in a research report via Seeking Alpha. “Our Neutral rating is not a call to sell the stock, which embeds significant optionality associated with carbon capture and the hydrogen economy, but we prefer other names in our coverage universe at present, and specifically Bloom Energy in the FuelCell/Hydrogen space.”

Coster initiated coverage of FuelCell on October 8 with a $3 per share price target and the Overweight rating. And Coster had cited that the company appears to be headed for profitability in 2022.