Plug Power Stock Surges After Announcing Key Partnerships

Morgan Stanley ugpraded the equity to "overweight" from "equal weight"

Digital Content Manager
Oct 13, 2021 at 10:22 AM
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Clean energy name Plug Power Inc (NASDAQ:PLUG) is in the spotlight this morning, after the company announced two key partnerships. The company is collaborating with Airbus (AIR) to study the feasibility of bringing green hydrogen to aircrafts and airports worldwide, and announced a collaboration with Phillips 66 (PSX) to develop low-carbon hydrogen businesses, after the refiner announced plans to cut 30% of greenhouse gas emissions by 2030. 

At least one analyst is responding to the news. Morgan Stanley upgraded the security to "overweight" from "equal weight," and hiked its price objective to $40 from $35. Analysts were mostly bullish towards PLUG coming into today, with 14 of the 22 in question calling it a "buy" or better. Plus, the 12-month consensus target price of $42.72 is a 34.3% premium to current levels. 

The security is surging in response, last seen up 7.3% to trade at $31.96. A broader look shows Plug Power stock trading sideways since July, with the $24 mark serving as a floor. The shares have now broken through overhead pressure at the $30 level, and are set for their first close above the 160-day moving average since early April. Year-over-year, PLUG is up 88.7%.

A shift in the options pits -- which lean bearish -- could keep wind at the equity's back. The stock's Schaeffer's put/call open interest ratio (SOIR), which sits in the 92nd percentile of its annual range, indicates short-term options traders have rarely been more put-biased.

Options traders are blasting Plug Power stock in the options pits. So far, 133,000 calls and 29,000 puts have been exchanged, which is eight times the intraday average. Most popular is the October 33 call, followed by the 32 call in the same monthly series, with positions being opened at both.

What's more, PLUG options are affordably priced right now. The security's Schaeffer's Volatility Index (SVI) of 69% sits higher than 16% of readings from the past 12 months, suggesting options players are pricing in low volatility expectations for the stock at the moment.

Finally, Plug Power stock's Schaeffer's Volatility Scorecard (SVS) is maxed out at 100. In other words, the security has exceeded options traders' volatility expectations in the last year.

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