Shares of FuelCell Energy Inc. FCEL,
declined 7.1% in premarket trading on Thursday after JP Morgan analyst Paul Coster turned bearish on the alternative energy company, suggesting the stock should be worth about half of its last closing price. Coster downgraded his rating from neutral to underweight and set a price target of $ 10, which is 47.8% lower than Wednesday’s close of $ 19.14 on Wednesday. Coster likes the company because he says it has “a strong backlog and a strengthened balance sheet.” He says FuelCell’s optionality benefits the versatility of its molten carbonate technology in industrial applications, and expects a “breakthrough contract” in the industrial, chemical or energy sectors. The problem is, Coster said he thinks the stock is “richly valued” at its current level. The stock was up 80.4% on a seven-day win streak to close on Wednesday at its highest price since June 2018. Separately, Coster started his fellow alternative energy company Plug Power Inc. PLUG,
with a neutral rating, saying that while the stock is his first choice in the hydrogen space, the price is “fully appreciated.” FuelCell’s stock is up nearly eightfold (+ 687.7%) in the last three months through Wednesday, while the S&P 500 SPX,
is stuck at 9.2%.