11 Most Promising Hydrogen and Fuel Cell Stocks According to Analysts
In this piece, we will take a look at the 11 most promising hydrogen and fuel cell stocks according to analysts. If you want to skip our overview of this particular sub segment of the clean energy industry, then you can take a look at the 5 Most Promising Hydrogen and Fuel Cell Stocks to Buy.
After humanity witnessed the marvels of mass production in the form of rapid industrialization that has revolutionized global travel and communication, humanity is now focused on technologies that are capable of meeting our massive energy needs and remaining environmentally friendly at the same time. After all, there is little point in progress if the Earth's natural climatic cycles are disturbed since a precise set of conditions must be met for humanity to thrive.
Most public attention when it comes to clean energy stocks is focused on solar power generation and storage systems, there are other sectors that are also seeking to develop technologies that can prove to be sustainable. One such segment is the hydrogen and fuel cell industry. Hydrogen is one of the most unique elements that one can find on the periodic table since it is the simplest and most abundant element in the universe. The first bit provides it with ample potential to be used as a fuel since hydrogen requires vastly less energy for ignition and it also readily combines with oxygen in a high energy reaction that produces water. Not only do these enable efficient energy generation, but they also mean that hydrogen is one of the cleanest fuels in the world as no toxic pollutant gasses are released into the atmosphere.
However, there's a catch. Since hydrogen is the smallest known atom in the universe, storing it is tricky. A little known fact about the element present in the atmosphere as a gas is that it is also used as a rocket fuel. This is because its low mass allows for more storage mass per volume, and the reaction of hydrogen with oxygen results in a high specific impulse. Specific impulse is a central component of rocketry, and in layman's terms, it measures the per unit of thrust produced by a mass of fuel flowing through a rocket. Since hydrogen is light, more of it can flow in a unit of time, leading to higher thrust.
So what's the catch? Well, hydrogen is notoriously difficult to handle. One of the biggest examples of this phenomenon came last year when NASA attempted to fly its Space Launch System (SLS) rocket for the first time. The SLS is the world's biggest operational rocket, and it uses hydrogen as its fuel. NASA's Artemis 1 launch in November 2023 was delayed multiple times as engineers struggled to plug leaks between the rocket and its fueling systems and were left bamboozled when the leaks stopped themselves. Using hydrogen as a rocket fuel also makes for some remarkable visuals, with the United Launch Alliance's Delta IV Heavy lighting its base on fire to dispose of the extra fuel before igniting America's largest rocket engines for liftoff.
Back to general use. Apart from being used in rockets, hydrogen is also seeing interest from the clean energy industry. Hydrogen fuel cells are used in cars and other electric vehicles to generate electricity through the chemical reaction between hydrogen and oxygen. This is quite similar to the way a lithium battery powers a car, with the primary difference between a hydrogen fuel cell and a lithium ion battery being that while the former produces electricity, the latter stores it for later use. Hydrogen's benefits that we've mentioned above also mean that fuel cell electric vehicles are more power efficient than battery powered ones. However, the caveat is that they are also more expensive, and as NASA will agree, hydrogen is trickier to store and transport.
Coming towards companies that are using hydrogen to generate electricity, we can name two stocks right off the tip of our tongue. These are FuelCell Energy, Inc. (NASDAQ:FCEL) and Plug Power Inc. (NASDAQ:PLUG). Talking about their share prices, the stocks haven't done well in 2023. Throughout the year, while some high growth areas such as technology have done well, others such as solar power have struggled as high rates stifle investor risk appetite. FuelCell Energy's shares are down by 37% year to date, and those of Plug Power have shed an even more painful 63%. Financial performance might also have a role to play here as Plug Power has missed analyst EPS estimates in all four of its latest quarters while FuelCell Energy has beaten estimates in three out of the four quarters.
Today, we'll look at the hydrogen and fuel cell stocks that analysts believe are promising. Some top picks are Nikola Corporation (NASDAQ:NKLA), Hyzon Motors Inc. (NASDAQ:HYZN), and Plug Power Inc. (NASDAQ:PLUG).
A mechanic in an orange jumpsuit inspecting a large truck and its hydrogen-electric battery.
Our Methodology
To compile our list of the hydrogen and fuel cell stocks that analysts believe are worth looking at, we ranked the constituents of the Global X Hydrogen ETF, VanEck Hydrogen Economy UCITS ETF, and our previous coverage to pick out and rank pure play hydrogen stocks or those that provide associated technologies that trade on U.S. exchanges by their average analyst share price percentage upside. Out of these, the most promising hydrogen and fuel cell stocks were chosen. For these stocks we have also mentioned hedge fund sentiment. Hedge funds’ top 10 consensus stock picks outperformed the S&P 500 Index by more than 140 percentage points over the last 10 years (see the details here). That’s why we pay very close attention to this often-ignored indicator.
11 Most Promising Hydrogen and Fuel Cell Stocks According to Analysts
11. FuelCell Energy, Inc. (NASDAQ:FCEL)
Latest Average Analyst Share Price Target: $1.7
Latest Share Price Percentage Upside: 3%
FuelCell Energy, Inc. (NASDAQ:FCEL) is an American pure play hydrogen fuel cell manufacturer whose products are used in a variety of commercial markets such as utilities and data centers. The latest hit to its stock came in December 2023 when its fiscal fourth quarter revenue tanked by 43%.
As of Q3 2023 end, nine out of the 910 hedge funds covered by Insider Monkey's database had held a stake in the company. FuelCell Energy, Inc. (NASDAQ:FCEL)'s largest hedge fund shareholder is D. E. Shaw's D E Shaw as it owns 2.7 million shares that are worth $3.5 million.
FuelCell Energy, Inc. (NASDAQ:FCEL) joins Hyzon Motors Inc. (NASDAQ:HYZN), Nikola Corporation (NASDAQ:NKLA), and Plug Power Inc. (NASDAQ:PLUG) in our list of the most promising hydrogen and fuel cell stocks according to analysts.
10. Linde plc (NASDAQ:LIN)
Latest Average Analyst Share Price Target: $432.62
Latest Share Price Percentage Upside: 5%
Linde plc (NASDAQ:LIN) is a backend hydrogen and fuel cell stock as the firm supplies industrial gasses that also include hydrogen, to businesses. The firm has beaten analyst EPS estimates in all four of its latest quarters and the shares are rated Buy on average with an average share price target of $432.62.
Insider Monkey dug around 910 hedge fund holdings for this year's third quarter and found that 71 were Linde plc (NASDAQ:LIN)'s shareholders. Alexander Mitchell's Scopus Asset Management owned the biggest stake which was worth $19.3 million.
9. Cummins Inc. (NYSE:CMI)
Latest Average Analyst Share Price Target: $254.79
Latest Share Price Percentage Upside: 8%
Cummins Inc. (NYSE:CMI) is an American industrial equipment manufacturer that also makes and sells hydrogen fuel cells. The firm is ending 2023 with a lot of controversy as it has agreed to pay a $1.5 billion fine over claims that its device enabled engines to omit data from counted in emissions readings.
As of September 2023 end, 30 out of the 910 hedge funds covered by Insider Monkey had bought a stake in the company. Cummins Inc. (NYSE:CMI)'s largest shareholder in our database is Ken Fisher's Fisher Asset Management through its $567 million investment.
8. Air Products and Chemicals, Inc. (NYSE:APD)
Latest Average Analyst Share Price Target: $307.76
Latest Share Price Percentage Upside: 13%
Air Products and Chemicals, Inc. (NYSE:APD) is another industrial raw materials company that sells gasses. It also makes and sells gas generation systems, and scored a win in November 2023 when its nitrogen generation systems were used on 2,000 ships.
By the end of 2023's September quarter, 43 out of the 910 hedge funds profiled by Insider Monkey were Air Products and Chemicals, Inc. (NYSE:APD)'s shareholders. Ken Griffin's Citadel Investment Group owned the biggest stake among these that coming through $280 million worth of shares.
7. New Fortress Energy Inc. (NASDAQ:NFE)
Latest Average Analyst Share Price Target: $44.20
Latest Share Price Percentage Upside: 17%
New Fortress Energy Inc. (NASDAQ:NFE) is a gas power generation firm that is also seeking to bring hydrogen based power generation up to scale. A slowdown in the global energy markets in 2023 has also translated into modest income statement performance for New Fortress Energy Inc. (NASDAQ:NFE) as it has beaten analyst EPS estimates in only two out of its four latest quarters.
Insider Monkey's third quarter of 2023 survey covering 910 hedge funds revealed that 21 had bought the firm's shares. New Fortress Energy Inc. (NASDAQ:NFE) 's largest hedge fund shareholder is Michael Novogratz's Fortress Investment Group through its $439 million stake.
6. Hyster-Yale Materials Handling, Inc. (NYSE:HY)
Latest Average Analyst Share Price Target: $82.5
Latest Share Price Percentage Upside: 39%
Hyster-Yale Materials Handling, Inc. (NYSE:HY) is an American firm that makes and sells industrial transportation productions such as forklifts. It is also one of the few companies in the world that offers a hydrogen powered top pick container handler, creating significant potential for global emissions reduction.
16 out of the 910 hedge funds part of Insider Monkey's Q3 2023 research had invested in Hyster-Yale Materials Handling, Inc. (NYSE:HY). Mario Gabell's GAMCO Investors was the biggest investor due to its $46 million investment.
Nikola Corporation (NASDAQ:NKLA), Hyster-Yale Materials Handling, Inc. (NYSE:HY), Hyzon Motors Inc. (NASDAQ:HYZN), and Plug Power Inc. (NASDAQ:PLUG) are some promising hydrogen and fuel cell stocks according to analysts.
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Disclosure: None. 11 Most Promising Hydrogen and Fuel Cell Stocks According to Analysts is originally published on Insider Monkey.