Plug Power Stock Forecast: Walmart deal puts PLUG on a charge higher

Plug Power (PLUG) stock had been trending steadily higher since bottoming out at the beginning of the year at $17.51. Since then the investor community has focused more and more attention on green energy stocks as the energy crisis deepens with the Ukraine conflict. Oil and gas prices have skyrocketed, meaning alternative power sources are in demand. This trend has been even more pronounced in Europe as the continent remains heavily dependent on Russian oil and gas imports. Plug Power is a fuel cell producer using hydrogen to produce a green and clean energy fuel cell. These fuel cell batteries can be used to power electric vehicles and commercial electric vehicles. The company also delivers green hydrogen solutions to businesses, and it is this area that saw PLUG and Walmart (WMT) reach a supply agreement.

PLUG Power Stock News: Walmart deal reignites interest

Plug Power announced on Tuesday that it had reached an agreement with Walmart to deliver up to 20 tonnes of liquid green energy hydrogen per day to Walmart in order for the retail giant to power lift trucks across its distribution network in the US.

“Walmart has been an early adopter of innovative hydrogen and fuel cell technology for over a decade, and our hydrogen-powered solutions offer a tool to enhance productivity improvements for Walmart’s operations,” said Andy Marsh, CEO of Plug. “Now our green hydrogen solutions will provide Walmart with the ability to achieve significant carbon reduction. We are honored to expand our relationship with Walmart and realize our shared vision for a green hydrogen future.”

Walmart also chipped in positively, saying that “Hydrogen is critical to helping us power a more sustainable supply chain, and Plug Power’s hydrogen solutions allow us to continue making progress,” said Jeff Smith, senior director of supply chain maintenance services. “Sourcing green hydrogen can help bring Walmart closer to reaching our goal of zero emissions by 2040.”

Positive slaps on the back all round then! Certainly, the investment community tended to agree as PLUG closed up just under 10% on the news.

PLUG Stock Forecast: Aiming for $32

A strong uptrend can be identified in PLUG stock since the beginning of 2022. This is down to PLUG itself. Is the company merely benefitting from the energy price escalation due to the Russia-Ukraine war though? That is not necessarily the key question depending on your time horizon. In the long run stock prices tend to reflect company-specific fundamentals, but short-term price swings can be due to news events and macroeconomic factors. Currently, the green energy sector is certainly en vogue as investors predict rising investment in alternative energy sources. How is PLUG positioned to benefit from this? It certainly has strong plans with revenue growth expected to maintain its current pace. Revenue more than doubled from 2019 to 2021, but PLUG is burning cash, excuse the pun, so it has yet to turn a profit. 

Looking solely at technicals, we had a powerful double bottom signal at $18.16. In line with this, both the Relative Strength Index (RSI) and Money Flow Index (MFI) signaled bullish divergences on the second bottom at $18.16. Since then it has been in a continuous uptrend peaking at $32.05 on April 4. The low at $24.72 is key and is our short-term pivot. Above and we look for an eventual break of $32.05 to confirm the uptrend with resistance at $28.36 on the way from the 200-day moving average. Closing above this gives increasing confidence that $32.05 will be broken.

PLUG stock chart, daily