FuelCell Energy sees itself as a leader in the CCS sector, where it is a frontrunner as a result of having its own carbon capture technology. With ExxonMobil, FCE has been active in such projects for years. Now the new climate protection program by the Biden administration may provide new potentials for orders, since the tax incentives, with amounts of 60 to 85 USD per tonne of CO2, signify for many affected businesses an impetus, but also a pressure, to upgrade here technologically.
True, it would be logical for cooperation partner ExxonMobil to exert some positive pressure here, but follow-up orders have so far failed to materialize – they’re only doing research together. But also clear: There is now another incentive to avoid CO2 emissions, because you could be charged with penalties otherwise. For FuelCell Energy, this is surely a turbocharge for new orders, along with the incentives for the use and storage of emitted CO2.
For now, we’re waiting until there are concrete orders. The Inflation Reduction Act will have a positive effect either way. The company, however, must prove this with orders. Currently, it’s valued at about 2 billion USD. With over 400 million USD in the bank, FCE takes sufficient account of current developments. For comparison, Bloom Energy has an order backlog of over 8.5 billion USD and already makes 1 billion USD turnover. According to statements by the company, FCE plans to generate a turnover of 300 million USD by 2025, and increase this to over 1 billion USD by year 2030, with a simultaneous sharp increase in profit margin.
Disclaimer
Each investor must always be aware of their own risk when investing in shares and should consider a sensible risk diversification. The FC companies and shares mentioned here are small and mid cap, i.e. they are not standard stocks and their volatility is also much higher. This report is not meant to be viewed as purchase recommendations, and the author holds no liability for your actions. All information is based on publicly available sources and, as far as assessment is concerned, represents exclusively the personal opinion of the author, who focuses on medium- and long-term valuation and not on short-term profit. The author may be in possession of the shares presented here.
Author: Sven Jösting, written August 30th, 2022
