Boston, MA 08/14/2014 (wallstreetpr) – An integrated fuel cell company, FuelCell Energy Inc (NASDAQ:FCEL) shares were upgraded by Cowen on Wednesday. However, the brokerage had not made changes to its price objective.
Rating of Stock
Financial advisor Cowen had upgraded the company’s shares to a rating of Outperform from market perform rating. The brokerage had reiterated its price target of $3. It suggests that there is a potential upside reward of over 25% based on $2.35 price.
The brokerage had pointed out progress in cutting energy costs as the reasons for its recent action. Analysts Thomas Boyes and Jeffrey Osborne said that the company could succeed in transitioning its power plants to a more mainstream technology from hydrogen fuel cell.
They have also indicated that FuelCell Energy Inc (NASDAQ:FCEL) had reduced its unsubsidized energy cost for a usual 2.8 MW plant to the 13 cents a kilowatt range. The cost falls to 9 – 11 cents a kWh when included investment tax credits apart from government subsidies. As a result, the pricing has become more attractive compared to the existing base load energy prices.
Early Stage Of Acceptance
The two analysts have also recognized that it is an early stage of acceptance as far as fuel cell power plants were concerned compared to the cheaper natural gas or other alternatives. However, it expects clean fuel power to maintain its higher penetration even as the expenses improve and production ramps.
Finance Deal With NRG Energy
Earlier on July 31, FuelCell Energy Inc (NASDAQ:FCEL) disclosed strategic financing deals with NRG Energy Inc (NYSE:NRG). Accordingly, the company would sell 14.6 million of its shares to NRG Energy at a price of $2.39 a share for $35 million proceeds. As a result, NRG Energy’s total holding in the company increased to 17 million shares or 6%, which included 2.4 million shares held before the current deal.
Similarly, the company struck a deal for $40 million revolving financing facility again with NRG Energy for project development.
