Switching to hydrogen can make these 3 stocks higher
In a report on the alternative fuel market, analyst Rupert Merer of the National Bank of Canada looks at the potential and potential of hydrogen as both an energy source and a raw material. At the heart of the matter, he writes: “Stakeholders in the energy markets agree that climate change is a problem and that decarbonising our energy supply requires a multifaceted approach, including H2. It is estimated that H2 can provide 15% to 25% of the global energy demand … “adds Merer, considering the potential benefits of hydrogen:” H2 has the ability to reduce emissions in sectors where decarbonisation is otherwise challenging, such as freight logistics, collective transport and industrial heating. What is hydrogen and why is it important? Hydrogen is the most abundant element in the observable universe and is a common building block in complex organic molecules. It is found in wood as well as in petroleum derivatives – there is a reason they are commonly called hydrocarbons – and, along with oxygen, is part of the common water molecule. Life as we know it wouldn’t be possible without hydrogen. With this in mind, using the TipRanks database, we’ve captured three stocks that have tapped some of Wall Street’s best analysts for profit in the growing hydrogen environment. Ballard Power Systems (BLDP) The first stock on the list is Ballard Power Systems, a hydrogen fuel cell manufacturer based in British Columbia, Canada. The company focuses on proton exchange membrane technology, one of several competing technologies in the hydrogen fuel cell market. Ballard’s PEM fuel cells are distributed worldwide and to date the company has manufactured and shipped more than 400 MW of fuel cell products. Ballard’s fuel cells are used in transportation technology to enable fully electric buses, trucks, trains and forklifts. Like many manufacturers who depend on the transportation industry, this was a difficult year for Ballard. The disruptions caused by the coronavirus have affected the company from two directions: firstly, the usual errors in the supply and distribution chains – but also Ballard markets its products to commercial users, who themselves have been locked up because of corona. In short, Ballard saw revenues fall in the first half of 2020 and they have yet to recover. Third quarter sales were $ 25.6 million, in line with the first and second quarters of the year. However, Ballard’s stock price has been up and up throughout the year despite some brief spells of volatility. In total, shares have grown 170% since the beginning of the year. The benefits demonstrate the cachet of hydrogen in a market that is actively seeking renewable, less polluting and non-emission free energy sources. Hydrogen ticks all three boxes. Five-star analyst Craig Irwin, who covers Ballard for Roth Capital, sees the company in a healthy position for rapid future growth. “BLDP left 3Q20 with $ 361 million in cash and no debt, and with only $ 100 million – $ 120 million in capital needed to generate positive income. Mgmt was clear that it intends to more actively pursue M&A targets. across the H2 and FC value chains […] We remain optimistic about the LT revenue increase supported by the new China FC subsidy program, and would be buyers in the event of any weakness, “Irwin said. Therefore, Irwin rates BLDP as a Buy, and its $ 25 price target implies space. growth in 2021. (Click here to view Irwin’s track record) Wall Street broadly agrees with this analysis, and in recent months BLDP has received 3 Buy ratings and 1 Hold from Street analysts. With an average price target of $ 24 per share, the potential benefit is ~ 24%. (See BLDP Stock Analysis on TipRanks) Air Products and Chemicals (APD) Air Products and Chemicals is best known as a supplier of industrial gases – making it a natural In its pure form, hydrogen is gaseous under ‘normal’ conditions. APD took advantage of that natural fit earlier this year and entered into a contract to acquire 5 hydrogen production plants in an agreement on water. arde of $ 530 million. Together with the new plants, APD also sealed its position as a major hydrogen supplier to PBF Energy. APD’s acquisitions show that it is serious about becoming a long-term supplier to the hydrogen industry. APD is already a major supplier to hydrogen refineries, providing a pure gas that can be used as in transportation fuel technology. In the recently fiscal 4Q20, APD missed earnings targets but exceeded earnings forecasts. FQ4 sales reached $ 2.32 billion, 2% higher than year-on-year and also 2% higher than estimates. Argus analyst Bill Selesky appreciates APD’s overall position in the market, noting, “Despite the weak fiscal 4Q20 results as a result of the pandemic, we believe performance will start to improve. We also believe that APD is extremely well positioned to manage this period due to its stable cash flows, below average debt and investment grade credit standing. Selesky gives APD stock a price target of $ 360, suggesting a 33% rise, and maintains a Buy rating on the stock. (Click here to view Selesky’s track record) Air Products has 11 recent ratings, splitting 10 to 1 into hold and hold, and the stock providing a Strong Buy analyst consensus rating. The average price target is $ 311.10, indicating a potential 15% rise from current levels. (See APD Stock Analysis on TipRanks) BP PLC (BP) Last but not least is BP, the petroleum giant. This company has a reputation in the industry as a leader in non-petroleum, renewable energy sources, and has pioneered initiatives in the fields of wind, solar and hydrogen energy in the past. Last year, the company joined the Global Hydrogen Council. As a major player in the natural gas market, BP is well positioned to also become a supplier of ‘blue’ hydrogen, or H2 derived from natural gas sources. BP is also running a project at its Lingen refinery in northwestern Germany, involving the facility to produce hydrogen from water. The project is in partnership with Orsted, and when fully online in 2024, it will be able to produce up to one ton of clean hydrogen per hour. Getting ahead of the renewable energy market is one way BP is on track to support its future position. The hydrocarbon industry won’t last forever, and 2020 was a particularly difficult year. Shares are down 36% so far and quarterly sales are down from $ 74 billion in the first quarter to $ 44 billion in the third quarter. However, the company posted net profit of $ 100 million in Q3, after heavy losses in Q2. Sam Margolin, 5-star analyst at Wolfe Research, wrote of BP after the quarterly report: “Our instinct is that the underlying O&G story is more influential on short-term stock performance, although Lingen’s announcement is positive for BP as it reflects the company’s ability to partner with industry leaders to advance the net zero plan. ”Margolin is optimistic about BP, and his stance comes with an Outperform (ie Buy) rating. His $ 31 price target implies an increase of 41% in the coming year. (To view Margolin’s track record, click here) Overall, BP has an average buy rating by analyst consensus based on 6 reviews, including 4 purchases and 2 holds. $ 21.94 and the average price target of $ 29.80 suggests room for 36% upside potential in the next 12 months. (See BP Stock Analysis on TipRanks) To find good ideas for w For material stocks trading at attractive valuations, visit TipRanks ‘Best Stocks to Buy, a recently launched tool that brings together all of TipRanks’ insights on stocks. Disclaimer: The opinions expressed in this article are only those of the listed analysts. The content is provided for informational purposes only. It is very important to conduct your own analysis before making an investment.