Market Overview

Newly Public Bloom Energy Downgraded By Credit Suisse On Valuation: 'Much Work Remains To Be Done'

Newly Public Bloom Energy Downgraded By Credit Suisse On Valuation: 'Much Work Remains To Be Done'

Fuel cell power manufacturer Bloom Energy Corp. (NYSE: BE) was hit with a downgrade Monday a month after its initial public offering. 

The Analysts

Credit Suisse analyst Michael Weinstein downgraded Bloom Energy from Neutral to Underperform with a price target of $24.

The Thesis

Bloom Energy has disruptive potential but is being downgraded on valuation, Weinstein said in the Monday note. 

“Although the company has shown impressive success so far, much work remains to be done to continue lowering costs and deliver next generation improvements,” the analyst said. (See his track record here.)

Bloom Energy shares trade at 33-percent premium to Credit Suisse's target price. The surge in the stock comes with little fundamental justification, Weinstein said. 

Credit Suisse completed a detailed levelized cost of electricty, or LCOE, analysis for Bloom Energy.

“Our projection for Bloom’s LCOE of [less than] $90/MWh after the ITC phases out in 2024 is competitive in 40 states when compared to current retail electric rates. However, when looking at the narrower case of LCOE for a new $700/kW utility-scale combined cycle, we project Bloom is competitive in 15 states in 2024," Weinstein said. 

Price Action

Bloom Energy shares were trading down 4.12 percent at $29.99 at the time of publication Monday. 

Related Links:

'A True Disruptor': Wall Street Weighs In On Bloom Energy

FuelCell Energy Is The 'Clear Leader' In Stationary Fuel Cell Applications

Photo courtesy of Bloom Energy. 

Latest Ratings for BE

Sep 2020Morgan StanleyMaintainsOverweight
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