Cowen Downgrades Plug Power (PLUG) to Market Perform; Valuation Full, But FY14 Still Has Potential

Cowen and Company downgrades Plug Power (Nasdaq: PLUG) from Outperform to Market Perform, but raises its price target from $5.50 up to $7.50 following Q4 results.

Analyst Robert Stone commented that targeted bookings of $150 million in 2014 could yield a year-end backlog of $130 million, which covers 93 percent of the analyst's $140 million in FY15 sales.

Stone also observed three applications in development, which could be triggers for Plug Power in FY14. The analyst said, Transport refrigeration units (TRUs) should be deployed with Sysco in NY, ground support equipment is planned for a major FedEx airport hub, and range extenders should be added to 20 FedEx battery-electric delivery vehicles to be deployed in the LA basin. We model material revenue starting in 2015.

While Stone boosted his FY14 sales outlook from $67.4 million up to $70, his loss estimate remains at $.05 per share. The analyst cites lower gross margin and higher WAS. We raised 2017-18E EPS 2c each (5 percent), to 27c and 33c, on higher product GM from internally developed high-power stacks, he said.

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