The green hydrogen boom holds substantial potential. In fact, according to analysts at Strategic Market Research, the market could be worth $75.72 billion by 2030. By 2050, analysts at Deloitte say it could be worth $1.4 trillion by 2050. All of which could have a big impact on the hydrogen stocks we’ll mention below.
Deloitte explains that green hydrogen will proliferate widely because it’s an important means of reducing carbon emissions. In addition, the firm went on to explain that if we are to meet net-zero compliance by 2050, the world will need “Over US$9 trillion of cumulative investments in the global clean hydrogen supply chain.”
That being said, investors may want to consider taking a position in the following hydrogen stocks.
Hydrogen Stocks: Plug Power (PLUG)
The latest earnings-induced pullback in Plug Power (NASDAQ:PLUG) may be a buying opportunity.
Granted, the company’s net loss increased to $236.4 million, or 40 cents a share from a loss of 30 cents, year over year. However, revenues did rise about 72% year over year to $260.2 million. And, despite the losses, the company has said it has “clear short-term goals to improve profitability in the second half of 2023 and position additional cost-down initiatives through 2024 as we significantly ramp sales volumes.” So, all is not lost here. Helping, the company reiterated its full-year revenue guidance of $1.2 billion to $1.4 billion, which is in line with expectations. Also, let’s not forget that the global hydrogen electrolyzer market – valued at $350.6 million in 2021 – could be worth about $3.7 billion by 2032, as noted by Future Market Insights.
In addition, analysts at Jefferies just assumed coverage of Plug Power with a buy rating, with a price target of $12 per share.
Linde (LIN)
Linde (NYSE:LIN) is “the largest liquid hydrogen producer in the U.S.,” and is looking to exploit the green hydrogen boom. Specifically, the company at the beginning of this year announced that it was launching “several green hydrogen projects it is planning across the U.S.,” as noted by Seeking Alpha. By the end of next year, Linde says that its green hydrogen production will allow it “to avoid up to 75K metric tons/year of carbon dioxide equivalent emissions.”
With earnings, the company just posted Q2 EPS of $3.57, which beat expectations by nine cents. It also increased its full-year 2023 adjusted EPS to a range of $13.80 to $14, which is about 12% to 14% growth year over year. Revenue of $8.2 billion unfortunately missed estimates by $500 million. But analysts are still upbeat, with many raising their price targets. That includes Barclays, JP Morgan, Wells Fargo, Mizuho, BMO Capital, and HSBC.
Air Products & Chemicals (APD)
Air Products & Chemicals (NYSE:APD) appears to be Saudi Arabia’s key partner when it comes to hydrogen. As I noted in a previous column, APD launched a joint venture in the region to create ”650 tons per day” of green hydrogen.
Moreover, Saudi Arabia’s sovereign wealth fund reported that it owned 2.75 million shares of APD stock as of the end of Q2, up from 2.7 million at the end of Q1. The Saudis obviously have big plans for APD in the hydrogen space. And given the country’s vast wealth, they can spend huge amounts making sure that APD has sufficient funds to become a huge player in green hydrogen. Analysts at Mizuho appear to like the APD stock here, too. The firm just raised its price target to $330 from $322 a share. BMO Capital also reaffirmed a buy rating on the APD stock, with a target price of $365 a share.
On the date of publication, Larry Ramer was long PLUG. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
