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Plug Power Looks Good to Analysts. They Aren’t Spooked by Accounting Errors.

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Plug Power develops hydrogen-fuel cell systems for electric cars.

David McNew/Getty Images

Hydrogen-fuel cell company Plug Power is looking good to Wall Street, even though it’s restating financial statements because of accounting mistakes made in the past couple of years. The errors shook investors, and shares fell almost 8% on the news.

But many analysts think the dip in

Plug Power

(ticker: PLUG) stock is actually a buying opportunity.

That’s how Cannacord analyst Jed Dorsheimer feels. He isn’t concerned after a call to Plug management. “The adjustments are largely related to balance sheet” wrote Dorsheimer. What’s more, Plug management told him the coming adjustments will have no impact on current contracts.

Because of what he heard, Dorsheimer didn’t change his rating—Buy—or his price target—$69. Roth Capital analyst Craig Irwin also rates Plug shares Buy. His price target is $75 a share.

Irwin wrote Wednesday that he expected shares to fall after Plug disclosed the errors and sees “nothing nefarious” about the company’s intention to redo the statements, adding a new accounting standard for lease accounting is what’s behind the restatements—“not any attempt to cook the books.”

The future is Irwin’s focus, too. “Plug Power’s growth opportunities that lie ahead do not use exotic accounting and purchase accounting methodologies for its hydrogen development efforts.”

Plug stock did get one downgrade. On Wednesday, Truist analyst Tristan Richardson dropped his rating to Hold from Buy and lowered his price target to $42 from $65. He is still bullish about the future, but believes Plug shares will languish until investors adapt to the changes.

Oppenheimer analyst Colin Rusch only sees the restatement only as a “modest overhang” on Plug’s stock price. “We remain constructive on Plug’s growth, strategic position, and the strength of its balance sheet to help facilitate growth,” wrote Rusch in a Wednesday report. His rating is the equivalent of Buy and his price target is $62 share.

Overall, almost 75% of analysts covering the stock rate shares Buy. The average Buy-rating ratio for stocks in the Dow Jones Industrial Average is about 60%. And the average analyst price target is about $62 a share, well above where the stock is trading.

Plug stock is down another 3.6% Thursday in midday trading, to below $38 a share. The S&P 500, by comparison, is down 0.4%. The Dow Jones Industrial Average is up 0.4%.

Write to Al Root at [email protected]

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