Over the past week, the stock of the Connecticut-based fuel company FuelCell Energy, Inc. (NASDAQ: FCEL) climbed nearly 40%. News regarding development in the company’s collaboration with Toyota Motor Corporation (NYSE: TM) and its other partnership with Exxon Mobil Corporation (NYSE: XOM) were two major catalysts driving the stock in the last few days. Furthermore, one of the biggest investment companies in the US BlackRock, Inc. (NYSE: BLK) increased its stake in FCEL last week. With the company expecting its Toyota plant to start operating in Q3 of this year while anticipating its Derby, Connecticut power grid one to start operating in Q4, FCEL stock could continue its rally going into the latter half of the year.
FCEL Fundamentals
With rising concerns about climate change, cutting emissions and energy transitions is one of the world’s current biggest challenges. Enter FCEL, the company that manufactures and operates fuel cell power plants, especially hydrogen ones. The idea of hydrogen production is using natural gas or renewable biogas, to produce hydrogen, power, and water through a trigeneration platform or by a solid oxide platform where water is split into oxygen and hydrogen which can be stored as compressed gas for future use.
Despite hydropower forming only 6.4% of different sources of energy used to fulfill energy demand in 2020, the demand for hydrogen is expected to grow to 500–680 million metric tons (MT) by 2050 compared to 87 MT in 2020. The demand for hydrogen and other clean sources of energy might increase even further due to the European Union’s proposed approximately $270 billion program that would offer tax breaks for businesses investing in net-zero technology. Moreover, the market size of hydrogen production has been valued at $155.35 billion in 2022 and is expected to grow at a compound annual growth rate (CAGR) of 9.3% from 2023 to 2030. With this in mind, FCEL could witness a surge in its demand long term.
Partnering with Anaergia Inc, FCEL is set to receive natural gas from the company’s subsidiary SoCal Biomethane, LLC to produce hydrogen and electricity using FCEL’s trigeneration platform for Toyota Motor Corporation’s (NYSE: TM) Logistics Services Center at the Port of Long Beach in California. The facility is Toyota’s largest port operation handling import/exports for North America and processes about 200,000 vehicles per year, where it will be powered by FCEL’s hydrogen fuel cells which will produce a net of 2.3 megawatts of electricity. Moreover, FCEL will produce approximately 1.3 tons of renewable hydrogen per day to fuel Toyota Mirai which is Toyota’s hydrogen fuel cell vehicle. The global hydrogen fuel cell vehicle market size was valued at $0.92 billion in 2021 and is projected to reach $43.2 billion by 2031, growing at a CAGR of 45.5% from 2022 to 2031. With this in mind, FCEL could prove itself as a magnate in this aggressively growing market if its partnership with Toyota bodes well.
Alongside hydrogen production, FCEL offers carbon capture services where its platforms can capture carbon emissions from the exhaust streams of coal or gas-fired power plants that can be recycled by being sold or used for industrial processes while simultaneously producing clean power. This technology is to be demonstrated in one of Exxon Mobil Corporation’s (NYSE: XOM) facilities after FCEL secured an order from the Texas-based oil and gas company. The demonstration project is expected to be a full-scale prototype of the modules utilized in large-scale systems for industrial and commercial point source carbon capture applications. However, ExxonMobil hasn’t made a final investment decision yet, but the company stated that the order is a crucial step in equipment procurement and module engineering work.
Using its carbon capture platform, FCEL is set to provide enhanced grid resiliency, reliability, and low carbon power to the Connecticut power grid as the company is currently constructing a plant in Derby, Connecticut. This 14-megawatt installation will be the second largest installed fuel cell platform in the US, only falling behind FCEL’s other 15-megawatt platform in Bridgeport, Connecticut. The company expects commercial operations to begin in Q4 2023, which could boost FCEL’s stock price upon operation.
In other news, BlackRock, Inc. (NYSE: BLK) – the New York-based multinational investment company – has its stake in FCEL shares by 8.59% at the start of May. Blackrock now owns 10.3% of FCEL with 41.6 million shares which is an increase from 38.3 million shares back in January and a 0.8% increase in ownership. As a result, the FCEL stock forecast could be promising having the backing of one of the biggest investment companies in the US.
FCEL Financials
In its Q1 2023 report, FCEL reported $892.3 million in assets, including $315 million in cash and cash equivalents. FCEL witnessed a decline in its assets from $939.7 million, including a decline in its cash and equivalents from $458 million in Q4 2022. FCEL’s liabilities shrank QoQ from $185.3 million to $157.1 million as its current liabilities decreased from $85.8 million to $66 million while its long-term debt decreased from $82.8 million to $81.5 million.
For the three months ended January 31, FCEL revenues grew YoY from $31.7 million to $37 million, while its gross profit increased from a loss of $2.8 million to a profit of $5.2 million as its cost of revenues decreased from $34.6 million to $31.8 million. Moreover, FCEL’s operating loss shrank YoY from $44.8 million to $22.4 million. Finally, FCEL’s net loss also shrank YoY from $46.1 million to $21 million.
Technical Analysis
FCEL stock’s trend is bullish as it is currently trading in an upwards channel.
Looking at the indicators, FCEL stock is currently trading above the 21 MA, 50 MA, and 200 MA which is a bullish sign. The RSI is approaching overbought at 60 and the MACD is bearish.
Fundamentally, FCEL stock’s most recent catalysts are more news regarding its collaboration with Toyota and its other one with ExxonMobil, in addition to Blackrock increasing its stake in the company. FCEL stock has two upcoming catalysts which are the expected commercial operation of its trigeneration platform in Toyota’s Logistics Services Center in Q3 and the expected commercial operation of its carbon capture platform in the Derby, Connecticut power grid plant.
FCEL stock price is expected to increase in light of these catalysts. A possible entry point would be at current price as it’s currently testing the lower trend line, taking profit on testing the upper trend line, while leaving a tail anticipating the expected operation of its platforms in Q3 and Q4.
FCEL Forecast
After partnering with Anaergia Inc, FCEL is set to receive the necessary natural gas that will be used to produce hydrogen and power through its trigeneration platform, which is expected to operate in Q3 of this year for Toyota’s Logistics Services Center. Furthermore, FCEL secured an order from ExxonMobil and is set to demonstrate its carbon capture platform in one of its facilities. FCEL is also constructing a carbon capture platform that is set to power the Derby, Connecticut power grid which is expected to start operation in Q4 of this year. Based on these reasons, the FCEL stock forecast could be bullish for the rest of 2023. Finally, the European Union’s $270 billion program offering tax breaks for businesses investing in net-zero technology could further increase the rising demand for hydrogen fuel cells making FCEL stock an exceptional long-term investment.
FCEL Fundamentals
With rising concerns about climate change, cutting emissions and energy transitions is one of the world’s current biggest challenges. Enter FCEL, the company that manufactures and operates fuel cell power plants, especially hydrogen ones. The idea of hydrogen production is using natural gas or renewable biogas, to produce hydrogen, power, and water through a trigeneration platform or by a solid oxide platform where water is split into oxygen and hydrogen which can be stored as compressed gas for future use.
Despite hydropower forming only 6.4% of different sources of energy used to fulfill energy demand in 2020, the demand for hydrogen is expected to grow to 500–680 million metric tons (MT) by 2050 compared to 87 MT in 2020. The demand for hydrogen and other clean sources of energy might increase even further due to the European Union’s proposed approximately $270 billion program that would offer tax breaks for businesses investing in net-zero technology. Moreover, the market size of hydrogen production has been valued at $155.35 billion in 2022 and is expected to grow at a compound annual growth rate (CAGR) of 9.3% from 2023 to 2030. With this in mind, FCEL could witness a surge in its demand long term.
Partnering with Anaergia Inc, FCEL is set to receive natural gas from the company’s subsidiary SoCal Biomethane, LLC to produce hydrogen and electricity using FCEL’s trigeneration platform for Toyota Motor Corporation’s (NYSE: TM) Logistics Services Center at the Port of Long Beach in California. The facility is Toyota’s largest port operation handling import/exports for North America and processes about 200,000 vehicles per year, where it will be powered by FCEL’s hydrogen fuel cells which will produce a net of 2.3 megawatts of electricity. Moreover, FCEL will produce approximately 1.3 tons of renewable hydrogen per day to fuel Toyota Mirai which is Toyota’s hydrogen fuel cell vehicle. The global hydrogen fuel cell vehicle market size was valued at $0.92 billion in 2021 and is projected to reach $43.2 billion by 2031, growing at a CAGR of 45.5% from 2022 to 2031. With this in mind, FCEL could prove itself as a magnate in this aggressively growing market if its partnership with Toyota bodes well.
Alongside hydrogen production, FCEL offers carbon capture services where its platforms can capture carbon emissions from the exhaust streams of coal or gas-fired power plants that can be recycled by being sold or used for industrial processes while simultaneously producing clean power. This technology is to be demonstrated in one of Exxon Mobil Corporation’s (NYSE: XOM) facilities after FCEL secured an order from the Texas-based oil and gas company. The demonstration project is expected to be a full-scale prototype of the modules utilized in large-scale systems for industrial and commercial point source carbon capture applications. However, ExxonMobil hasn’t made a final investment decision yet, but the company stated that the order is a crucial step in equipment procurement and module engineering work.
Using its carbon capture platform, FCEL is set to provide enhanced grid resiliency, reliability, and low carbon power to the Connecticut power grid as the company is currently constructing a plant in Derby, Connecticut. This 14-megawatt installation will be the second largest installed fuel cell platform in the US, only falling behind FCEL’s other 15-megawatt platform in Bridgeport, Connecticut. The company expects commercial operations to begin in Q4 2023, which could boost FCEL’s stock price upon operation.
In other news, BlackRock, Inc. (NYSE: BLK) – the New York-based multinational investment company – has its stake in FCEL shares by 8.59% at the start of May. Blackrock now owns 10.3% of FCEL with 41.6 million shares which is an increase from 38.3 million shares back in January and a 0.8% increase in ownership. As a result, the FCEL stock forecast could be promising having the backing of one of the biggest investment companies in the US.
FCEL Financials
In its Q1 2023 report, FCEL reported $892.3 million in assets, including $315 million in cash and cash equivalents. FCEL witnessed a decline in its assets from $939.7 million, including a decline in its cash and equivalents from $458 million in Q4 2022. FCEL’s liabilities shrank QoQ from $185.3 million to $157.1 million as its current liabilities decreased from $85.8 million to $66 million while its long-term debt decreased from $82.8 million to $81.5 million.
For the three months ended January 31, FCEL revenues grew YoY from $31.7 million to $37 million, while its gross profit increased from a loss of $2.8 million to a profit of $5.2 million as its cost of revenues decreased from $34.6 million to $31.8 million. Moreover, FCEL’s operating loss shrank YoY from $44.8 million to $22.4 million. Finally, FCEL’s net loss also shrank YoY from $46.1 million to $21 million.
Technical Analysis
FCEL stock’s trend is bullish as it is currently trading in an upwards channel.
Looking at the indicators, FCEL stock is currently trading above the 21 MA, 50 MA, and 200 MA which is a bullish sign. The RSI is approaching overbought at 60 and the MACD is bearish.
Fundamentally, FCEL stock’s most recent catalysts are more news regarding its collaboration with Toyota and its other one with ExxonMobil, in addition to Blackrock increasing its stake in the company. FCEL stock has two upcoming catalysts which are the expected commercial operation of its trigeneration platform in Toyota’s Logistics Services Center in Q3 and the expected commercial operation of its carbon capture platform in the Derby, Connecticut power grid plant.
FCEL stock price is expected to increase in light of these catalysts. A possible entry point would be at current price as it’s currently testing the lower trend line, taking profit on testing the upper trend line, while leaving a tail anticipating the expected operation of its platforms in Q3 and Q4.
FCEL Forecast
After partnering with Anaergia Inc, FCEL is set to receive the necessary natural gas that will be used to produce hydrogen and power through its trigeneration platform, which is expected to operate in Q3 of this year for Toyota’s Logistics Services Center. Furthermore, FCEL secured an order from ExxonMobil and is set to demonstrate its carbon capture platform in one of its facilities. FCEL is also constructing a carbon capture platform that is set to power the Derby, Connecticut power grid which is expected to start operation in Q4 of this year. Based on these reasons, the FCEL stock forecast could be bullish for the rest of 2023. Finally, the European Union’s $270 billion program offering tax breaks for businesses investing in net-zero technology could further increase the rising demand for hydrogen fuel cells making FCEL stock an exceptional long-term investment.