In this article, we will look at the 10 most promising hydrogen and fuel cell stocks to buy now according to analysts. If you want to explore similar stocks, you can also take a look at 5 Most Promising Hydrogen and Fuel Cell Stocks According to Analysts.
Green hydrogen and fuel cells are gaining traction as the world looks for alternative sources to fossil fuels in its battle against climate change. Hydrogen is the most abundant element in the universe and is a powerful fuel source. It is an efficient and clean source of energy, producing near-zero emissions when burned. Fuel cells are devices that convert chemical energy from hydrogen into electrical energy. They are highly efficient and have no moving parts, making them a reliable source of power. With continued research and development, green hydrogen and fuel cells could become an important part of the global energy mix.
Analyses of the Global Green Hydrogen and Fuel Cell Industries
According to a report by MarketsandMarkets, the global green hydrogen industry was valued at $676 million in 2022 and is projected to grow at a compound annual growth rate of 61% from 2022 through 2027, reaching a value of $7.3 billion at the end of the forecasted period. The market’s expansion is expected to be primarily driven by a significant decrease in the cost of generating renewable energy from solar and wind sources, technological advancements in electrolysis technologies, and favorable demand trends from fuel cell electric vehicles (FCEVs) as well as the power generation industry. Some of the limiting factors the green hydrogen industry is faced with include hefty infrastructure costs for green hydrogen production and an underdeveloped market.
The report further pointed out that, segment wise, in 2022 the mobility segment accounted for the major market share of the green hydrogen industry and represented 58% of its value. The mobility segment is expected to grow at a CAGR of 63.4% and account for $4.55 billion of the green hydrogen market by 2027. The power generation segment accounted for $88.5 million of the market’s value in 2022, and is expected to grow at a CAGR of 63% from 2022 to 2027, reaching a value of $1.01 billion by the end of the forecasted period.
Another report by MarketsandMarkets estimated that the global fuel cell industry was valued at $2.9 billion in 2022 and is projected to grow to $9.1 billion by 2027, at a compound annual growth rate of 26.0%. The primary factors propelling this growth include a surge in demand for clean and emissions-free power generation and strict regulations for carbon emissions across the globe. A major limiting factor for the global fuel cell market is the high costs of rare-earth metals that are used as catalysts in fuel cells. This makes fuel cell technology more expensive, when compared to battery technology, and can impact FCEV sales.
The hydrogen and fuel cell market is a rapidly growing sector of the energy industry. With the need for clean and renewable energy sources, government incentives, and the increasing number of applications for hydrogen and fuel cells, the market is expected to continue to experience strong growth in the years to come. The key players in the hydrogen and fuel cell market include Air Products & Chemicals, Inc. (NYSE:APD), Bloom Energy Corporation (NYSE:BE), and Plug Power, Inc. (NASDAQ:PLUG), among others. These companies are investing heavily in research and development in order to further advance the hydrogen fuel cell technology and increase the efficiency of their products.
Photo by Tommy Krombacher on Unsplash
Our Methodology
After getting a general idea of the major players from industry analysis reports, we screened for stocks of companies that are operating in the green hydrogen and fuel cell industries. We narrowed down our list to stocks that were among consensus picks of Wall Street analysts and had promising upside potential based on analysts’ average price targets.
The average price targets were calculated by taking the mean of analysts’ 12-month price targets for each stock. The upside potential was calculated by taking the percentage change that the average price target represents from the stock’s share price, as of February 10.
We have ranked these stocks in ascending order of their upside potential, and have mentioned the hedge fund sentiment and top shareholders along with each of our picks.
10 Most Promising Hydrogen and Fuel Cell Stocks According to Analysts
10. Cummins Inc. (NYSE:CMI)
Number of Hedge Fund Holders: 32
Average Upside Potential as of February 10: 4.43%
Cummins Inc. (NYSE:CMI) is a leading global provider of diesel and natural gas engines, electric and hybrid powertrains, as well as related components. It has five distinct business segments: Engine, Distribution, Components, Power Systems, and New Power. Cummins Inc. (NYSE:CMI) is a pioneer and leader in hydrogen fuel cell technologies and its products are used in mobility applications ranging from commercial transport to military transport.
Over the past 3 months, Cummins Inc. (NYSE:CMI) has received 2 Buy and 6 Hold ratings from Wall Street analysts along with their 12-month price targets. The stock has a high forecast of $291 and a low forecast of $231. The stock’s average price target represents a 4.43% upside from its share price on February 10 which sits at $246.92.
This February, Deutsche Bank analyst Nicole Deblase revised her price target on Cummins Inc. (NYSE:CMI) to $231 from $235 and maintained a Hold rating on the shares. Cummins Inc. (NYSE:CMI) is one of the most promising hydrogen and fuel cell stocks according to analysts.
At the close of Q3 2022, 32 hedge funds were long Cummins Inc. (NYSE:CMI) and disclosed positions worth $526.4 million. As of December 31, First Eagle Investment Management is the most prominent shareholder in the company and has a position worth $498 million.
9. Shell plc (NYSE:SHEL)
Number of Hedge Fund Holders: 39
Average Upside Potential as of February 10: 6.48%
Oil giant Shell plc (NYSE:SHEL) has realized the potential of hydrogen and fuel cell technology. Shell plc (NYSE:SHEL) is building up its portfolio of hydrogen and fuel cell projects and is on track to build Europe’s largest renewable hydrogen plant, the Holland Hydrogen 1, by 2025. With advancements in fuel cell and hydrogen technologies, Shell plc (NYSE:SHEL) is well-positioned to capitalize on the secular tailwinds that are propelling this market and is one of the best hydrogen and fuel cell stocks to buy according to analysts.
Shell plc (NYSE:SHEL) has a consensus Buy rating among Wall Street analysts. The stock has received 12-month price targets from 7 analysts and has a high forecast of $79 and a low forecast of $42.04. The stock’s average price target implies an upside of 6.48% from $61.76, its share price on February 10.
At the end of Q3 2022, 39 hedge funds were eager on Shell plc (NYSE:SHEL) and held stakes worth $3.11 billion in the company. As of December 31, Pzena Investment Management is the leading investor in Shell plc (NYSE:SHEL) and has a position worth $156.6 million in the company.
In addition to Shell plc (NYSE:SHEL), Air Products & Chemicals, Inc. (NYSE:APD), Bloom Energy Corporation (NYSE:BE), and Plug Power, Inc. (NASDAQ:PLUG) are all making strides in advancing hydrogen and fuel cell technology and are expected to benefit from the strong market outlook for the green hydrogen and fuel cells.
8. Nel ASA (OTC:NLLSF)
Number of Hedge Fund Holders: N/A
Average Upside Potential as of February 10: 8.94%
Nel ASA (OTC:NLLSF) is a pioneer in hydrogen and fuel cell technology. The company offers various services for the production, storage, and distribution of hydrogen from renewable energy sources across Norway, the U.S., Denmark, and South Korea. Nel ASA (OTC:NLLSF) operates through two divisions: Nel Hydrogen Fueling and Nel Hydrogen Electrolyser. The company’s Nel Hydrogen Fueling produces H2Station hydrogen fueling stations that provide fuel cell electric vehicles with the range and fueling capabilities that match those of traditional fossil fuel vehicles such as cars, buses, trucks, and forklifts among others. Through its second division, Nel ASA (OTC:NLLSF) produces and installs electrolysers for the production of hydrogen based on alkaline and proton exchange membrane water electrolyser technology.
On February 7, Morgan Stanley analyst Arthur Sitbon upgraded Nel ASA (OTC:NLLSF) to Overweight from Equal Weight and raised his price target on the stock to NOK 22 from NOK 13. Sitbon is confident in the ability of Nel ASA (OTC:NLLSF) to drive outperformance in a stronger market environment for green hydrogen.
4 Wall Street analysts have given their 12-month price targets for Nel ASA (OTC:NLLSF) over the past 3 months. The stock has a consensus Buy rating among analysts and has a high forecast of $2.26 and a low forecast of $1.42. The stock’s average price target represents an upside of 8.94% from $1.79, its share price on February 10. Nel ASA (OTC:NLLSF) is ranked among the most promising hydrogen and fuel cell stocks to buy according to analysts.
7. Linde plc (NYSE:LIN)
Number of Hedge Fund Holders: 56
Average Upside Potential as of February 10: 13.03%
Linde plc (NYSE:LIN) is a leader in industrial gases and has one of the world’s largest liquid hydrogen distribution systems in the world. In the third quarter of 2022, Linde plc (NYSE:LIN) announced its plans to build an industrial-scale 35-megawatt PEM electrolyzer in Niagara Falls. The plant is expected to be operational by 2025. The company is at the forefront of the energy transition and has reportedly installed 80 hydrogen electrolysis plants and more than 200 hydrogen fueling stations across the globe.
Linde plc (NYSE:LIN) has a consensus Strong Buy rating among Wall Street analysts. Over the past 3 months, the stock has received 13 Buy ratings from analysts and has a maximum price target of $418, and a minimum price target of $300.54. The stock’s average price target of $375.29 represents a 13.03% upside from $332.04, its share price on February 10.
On February 8, Deutsche Bank analyst David Begleiter raised his price target on Linde plc (NYSE:LIN) to $385 from $355 and maintained a Buy rating on the shares. Linde plc (NYSE:LIN) is one of the most promising hydrogen and fuel cell stocks to buy according to analysts.
At the end of the third quarter of 2022, Linde plc (NYSE:LIN) was a part of 56 investors’ portfolios that disclosed collective positions worth $3.47 billion. As of December 31, Impax Asset Management is the most prominent investor in Linde plc (NYSE:LIN) and has a stake worth $944.7 million.
Here is what Madison Funds had to say about Linde plc (NYSE:LIN) in its fourth-quarter 2022 investor letter:
“Linde plc (NYSE:LIN) stock was strong during the fourth quarter following a solid third quarter. Linde remains well positioned with the passage of the Inflation Reduction Act and energy transition with carbon dioxide sequestration opportunities, gasification services, and various hydrogen projects. Linde and Schlumberger announced that they entered into a collaboration of carbon capture, utilization, and sequestration (CCUS) projects to accelerate decarbonization solutions across industrial and energy sectors. The collaboration will combine decades of experience in carbon dioxide capture and sequestration. The collaboration will focus on hydrogen and ammonia production where carbon dioxide is a by-product. The International Energy Agency estimates that 6 Gigatons of carbon dioxide will need to be abated with CCUS in order to reach net zero by 2050. During the quarter, Linde also announced that it became a signatory to the United Nations Global Compact (UNGC), the world’s largest corporate sustainability initiative. As a signatory, Linde has committed to aligning its strategy and activities with the UNGC’s Ten Principles across human rights, labor, environment, and anti-corruption.”
6. DuPont de Nemours, Inc. (NYSE:DD)
Number of Hedge Fund Holders: 45
Average Upside Potential as of February 10: 13.67%
DuPont de Nemours, Inc. (NYSE:DD) is a global leader in the specialty materials industry. The company has a plethora of offerings for the energy industry, ranging from the exploration and production of oil and gas to solar PV technologies, wind technologies, and fuel cell technologies. The stock is placed among analysts’ most promising hydrogen and fuel cell stocks and has the potential to gain 13.67%, on average, from its share price of $75.81 on February 10.
DuPont de Nemours, Inc. (NYSE:DD) has received 9 Buy ratings and 4 Hold ratings from Wall Street analysts over the past 3 months. The stock has a high forecast of $103 and a low forecast of $77. The stock’s average price target sits at $86.17.
This February, Deutsche Bank analyst David Begleiter raised his price target on DuPont de Nemours, Inc. (NYSE:DD) to $82 from $80 and maintained a Hold rating on the shares.
At the end of Q3 2022, DuPont de Nemours, Inc. (NYSE:DD) was a part of 45 investors’ portfolios that held positions worth $1.03 billion in the company. As of December 31, Levin Easterly Partners is the top investor in the company and has a stake worth $13.8 million.
Companies that are leading the hydrogen and fuel cell space include DuPont de Nemours, Inc. (NYSE:DD), Air Products & Chemicals, Inc. (NYSE:APD), Bloom Energy Corporation (NYSE:BE), and Plug Power, Inc. (NASDAQ:PLUG).
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Disclosure: None. 10 Most Promising Hydrogen and Fuel Cell Stocks According to Analysts is originally published on Insider Monkey.
