Raymond James Calls Bottom for Bloom Energy Stock

Pessimism has been ramping up from several directions

Digital Content Manager
Oct 5, 2021 at 10:09 AM
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The shares of Bloom Energy Corp (NYSE:BE) are surging this morning, up 7.7% at $18.21 after Raymond James upgraded the stock to "strong buy" from "outperform," noting that its recent underperformance makes it an attractive valuation play. In addition, the analyst in question called Bloom Energy stock a "high-beta, aggressive growth idea." The analyst also cut its price target to $29 from $33, though this is still a 71.5% premium to last night's close.

The security has been the recipient of plenty of analyst attention recently. Last month BMO and Piper Sandler initiated coverage on BE with "market perform" and "neutral" ratings, respectively. Coming into today, analysts were still mostly hesitant, with five "buy" or better ratings on the board, compared to eight "hold" recommendations. Meanwhile, the 12-month consensus price target of $30.11 is a 72.4% premium to last night's close. 

The stock hit an 11-month low during yesterday's trading, and is down roughly 40% in 2021, guided lower by recent pressure at the 20- and 320-day moving averages. If this really is a bottom for BE, a short squeeze could put additional wind a the stock's back. The 17.9 million shares sold short make up a solid 12.8% of the stock's current available float, and it would take over eight days to buy back these bearish bets at BE's average daily pace of trading. 

An unwinding of pessimism among options traders could also push BE higher. The equity's Scaheffer's put/call open interest ratio (SOIR) of 2.08 stands higher than 95% of readings from the past year, suggesting these short-term options traders have rarely been more put-biased. Additionally, the stock sports a 50-day put/call volume ratio that sits in the 92nd percentile of its annual range at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX). This means long puts have rarely ben more popular. 

 

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