This demon stock soared 50% last month With morgan Stanley optimistic?

Shares of hydrogen fuel cell maker Plug Power (PLUG) have surged more than 50 percent over the past month, but Morgan Stanley said there is more upside ahead of the company's third-quarter earnings report.

The company believes Plug Power will achieve strong revenue in the most recent quarter, which will drive the stock price higher. Specifically, Morgan Stanley believes gross profit will grow 22% year-over-year to $151 million.

Analysts led by Stephen Byrd wrote in a note to clients on Monday: "We expect double-digit growth in the company's revenue by 2050 and a significant expansion in profit margins in the near term as production scale and green hydrogen networks are established." "

Morgan Stanley rated the stock overweight with a target price of $43, about 12 percent above Friday's closing price.

Plug Power will report quarterly earnings later this month.

While Morgan Stanley expects the company to report a jump in total gross profit, the company noted that Plug Power's fuel delivery margins could be squeezed, in part due to disruptions caused by Hurricane Ida.

Byrd added: "Nonetheless, we see this as a transitional issue as PLUG has already started building several of its own green hydrogen production facilities, which will reduce its dependence on third-party gas suppliers." "

The company believes gross margins for the company's products will rise to 23 percent from 20 percent in the previous quarter and then return to the 30 percent to 35 percent range in 2022.

Morgan Stanley upgraded the company's stock rating to overweight on Oct. 13 and said the company "has the ability to become a leader in the hydrogen economy."

Thanks to a number of catalysts — including the company's announcement of partnerships with Airbus and Phillips 66 for its hydrogen business — Plug Power's stock has been rising over the past month.

The stock has gained 16 percent this year, outpacing the performance of iShares Global Clean Energy ETF iShares Global Clean Energy ETF (ICLN), which is down 10 percent so far this year. The S&P 500 is up 23% in 2021.

Morgan Stanley also said Sunrun (RUN) is also the first choice to enter the third quarter earnings report, and the residential solar company will release quarterly results on Thursday.

The investment bank noted that the addressable market for residential solar is large and has low penetration. Sunrun currently has the largest market share, which means it can benefit from "operational leverage, financing synergies, expanded sales channels and product offerings".

The company has a price target of $91 for the stock, 58 percent higher than friday's closing price.

This article originated from the Financial Circle Network