BMO Capital Markets analysts downgraded their recommendation for Plug Power (NASDAQ:PLUG) to Underperform from Market Perform, expressing concerns about the challenges the company may face in securing Department of Energy (DOE) funding.
The 12-month price target has been reduced to $2.50 from $3.50.
PLUG fell 1.6% in early Wednesday trade after rising 31% on Tuesday.
Despite a positive annual update call that led to stock surge, BMO Capital analysts envision further downside for Plug Power's shares.
“We see increasingly arduous path between now and when and if DOE funding flows. Furthermore, even with $1.6 billion in DOE funding we are skeptical of value accretion of PLUG’s additional hydrogen plants,” the analysts said.
BMO Capital anticipates that Plug Power will need to issue several hundred million in equity in 1Q due to a lower revenue base and weak margins.