Bloom Energy’s stock tumbles after J.P. Morgan downgrades, citing valuation

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Shares of Bloom Energy Corp.
BE,
-19.71%

tumbled 11.0% in morning trading Wednesday, to pull back from the previous session’s two-year closing high, after J.P. Morgan analyst Mark Strouse downgraded the alternative-energy company, primarily because of valuation. Strouse cut his rating to neutral from overweight, but raised his stock price target to $26, which is 4.5% below current prices, from $22. He said the downgrade comes after the stock’s big outperformance so far this year, in which it has now rocketed 264.4% while the S&P 500
SPX,
-0.93%

has gained 14.9%. “In our view the stock looks approximately fair value here, though there remains considerable optionality associated with the firm’s Hydrogen and Marine transportation initiatives,” Strouse wrote in a note to clients. “We think near-term results will be somewhat more pedestrian, remind investors that revenue growth is likely to accelerate in a year or two from now, when the electrolyzer and H2-fuel cell technology becomes commercially available.” The downgrade comes as part of Strouse’s broader call on the alternative-energy sector, in which he expects growth to accelerate in 2021. As part of the call, he also upgraded Array Technologies Inc.
ARRY,
+0.38%

to overweight from neutral.



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