Bloom Energy’s Strategic Agreement with AEP Enhances Market Position and Multi-Year Growth Prospects

Piper Sandler analyst Kashy Harrison upgraded the rating on Bloom Energy (BE – Research Report) to a Buy yesterday, setting a price target of $20.00.

Kashy Harrison has given his Buy rating due to a combination of factors surrounding Bloom Energy’s recent developments. A key influence is the significant agreement with AEP, which plans to secure up to 1 gigawatt of Bloom’s solid oxide fuel cells for use in data centers and other large energy users. This contract, estimated to be worth $3 billion in equipment alone, not only validates Bloom Energy’s technology for large-scale applications but also positions the company for potential future agreements with other large utilities.
Furthermore, the positive impact of this agreement is underscored by AEP’s forecasted commercial load growth and its substantial load commitments through 2029. This development, combined with Bloom’s strategic leverage towards load growth and its capability to provide rapid onsite power solutions, enhances the company’s market position. Additionally, the lack of risk associated with IRA credits due to the expiration of fuel cell ITC at the end of 2024 further supports a favorable stock performance outlook. Consequently, Kashy Harrison anticipates that Bloom Energy will experience robust multi-year growth, leading to a price target of $20 per share.

Harrison covers the Technology sector, focusing on stocks such as NEXTracker, Inc. Class A, Shoals Technologies Group, and Enphase Energy. According to TipRanks, Harrison has an average return of -13.1% and a 37.91% success rate on recommended stocks.

In another report released yesterday, Evercore ISI also reiterated a Buy rating on the stock with a $22.00 price target.

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Bloom Energy (BE) Company Description:

Bloom Energy Corp. engages in the manufacture and installation of on-site distributed power generators. Its product, Bloom Energy Server, converts standard low-pressure natural gas or biogas into electricity through an electrochemical process without combustion. The company was founded by K. R. Sridhar, John Finn, Jim McElroy, Matthias Gottmann, and Dien Nguyen on January 18, 2001 and is headquartered in San Jose, CA.