Fuel cell products developer Ballard Power Systems(NASDAQ: BLDP) didn't demonstrate much power on the stock market Wednesday. The company's share price closed more than 12% lower on a recommendation downgrade from an analyst. By contrast, the S&P 500 index nudged higher, rising by almost 0.1% on the day.
On the heels of Ballard's Capital Market Day, BMO Capital's Ameet Thakkar pushed his recommendation down one peg. He now feels it rates an underperform (sell, in other words); previously he had tagged it with a market perform (hold). Accompanying this change was a shift in price target -- this is now $4.25 per share, from $4.50.
Much of this was due to what Thakkar called a "tactical" factor, as Ballard's shares had increased sharply by 24% from last Friday's close.
The analyst was also concerned about fundamentals, specifically that "the inflection to positive gross margins and EBITDA (earnings before interest, taxes, depreciation, and amortization) remain further out in time (2025 and 2028, respectively)," as he wrote in his new note on the company.
The BMO Capital prognosticator was not the only pundit issuing a new take on Ballard stock. Susquehanna Research's Biju Perincheril had quite an opposite post-Capital Markets Day reaction. He bumped his price target higher, adding $1 to it for a new level of $5.50 per share. This doesn't make him a Ballard bull, though, as he maintained his neutral recommendation on the specialty industrial company's stock.
Overall, the analysts tracking the stock are expecting some improvement for Ballard in the near future, so perhaps Wednesday's investor reaction was overblown. On average, those prognosticators are modeling a slight narrowing of per-share loss for this year, and a nearly 10% rise in revenue.
10 stocks we like better than Ballard Power Systems
When our analyst team has a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market.*
They just revealed what they believe are the ten best stocks for investors to buy right now... and Ballard Power Systems wasn't one of them! That's right -- they think these 10 stocks are even better buys.
*Stock Advisor returns as of June 12, 2023