May 15th, 2024 | 07:00 CEST
Horror at Plug Power! The cash registers are ringing at TUI and Carbon Done Right Developments!
The stock market is sometimes crazy. Plug Power reported a slump in sales and further increasing losses, yet the share price can rise significantly. Is this the turnaround for the hydrogen share? What caused the share price to rise? In contrast, the cash registers are ringing at TUI and Carbon Done Right Developments. The latter is benefiting from milestone payments from oil giant BP for a reforestation project to improve its environmental footprint. And business is also booming at TUI. The tourism group will present its financial results today, and the outlook for the summer season should be positive. Analysts see 50% upside potential.
time to read: 3 minutes
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Author:
Fabian Lorenz
ISIN:
TUI AG NA O.N. | DE000TUAG505 , CARBON DONE RIGHT DEVELOPMENTS INC | CA14109M1023 , PLUG POWER INC. DL-_01 | US72919P2020
Table of contents:
"[...] The VERRA certification adds credibility to dynaCERT's emission reduction technologies by demonstrating compliance with internationally recognized standards for carbon emissions reductions and sustainable development. [...]" Jim Payne, CEO, dynaCERT Inc.
Author
Fabian Lorenz
For more than twenty years, the Cologne native has been intensively involved with the stock market, both professionally and privately. He is particularly passionate about national and international small and micro caps.
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Plug Power: Horrendous figures, but the share price is rising
The figures published by Plug Power for the first quarter of 2024 look anything but good. Revenue fell by 42.8% to USD 120 million compared to the same quarter of the previous year. Analysts had expected over USD 150 million. However, the loss increased. EBIT fell from USD -210 million to USD -259 million and the net loss from USD -208 million to USD -296 million. Earnings per share thus amounted to USD -0.46 (Q1 2023: USD -0.35). Analyst estimates were also missed here.
Plug CEO Andy Marsh's comment also sounded more like a rallying cry: "We continue to make steady progress by pursuing our stated goals and business priorities. As our financial performance improves in the coming quarters, Plug will maintain its leadership role in advancing the hydrogen economy, which is expected to see rapid expansion and widespread adoption worldwide in the coming decades."
Despite the disastrous figures, the share price rose by double digits following the publication. The primary source of hope is that Plug Power has increased prices, which is expected to have a positive impact as early as the second quarter of 2024. In addition, the hydrogen production plants in the US states of Georgia and Tennessee have reached their nominal capacity. Together, they produce 25 tons of liquid hydrogen per day. With the completion of the plant in Louisiana, capacity is set to increase to 40 tons per day over the course of the year. This should significantly reduce Plug Power's costs.
Carbon Done Right Developments: Milestone payment from BP
Carbon Done Right Developments Inc. occupies an exciting niche in the field of climate-friendly business models. Although "niche" is relative, emissions certificates constitute a billion-dollar market, and the Canadian company is on the way to building an interesting platform here. The core business is the protection of forests and mangroves from deforestation and their reforestation. The CO2 certificates generated in this way are sold to companies worldwide. This year, the business model has already been expanded to include a London-based blockchain-supported trading platform for emissions certificates.
The next milestone was recently reached. Carbon Done Right Developments has received the fourth disbursement of financing for the reforestation project in West Africa. The customer is a subsidiary of the oil company BP. A further payment is expected in the coming weeks. Carbon CEO James Tansey stated, "The restoration sites focus on idle land in Sierra Leone and provide direct income and long-term revenue sharing to smallholder farmers in these communities."
TUI share: Deutsche Bank sees fair value at EUR 10.50
TUI is also a potential customer of Carbon Done Right Developments. After all, the tourism group does not have a positive CO2 balance due to its airplanes and cruise ships. On this Wednesday, the Company will publish its figures for the second quarter and is expected to provide a positive outlook for the critical summer season.
In the run-up to the announcement of the figures, Deutsche Bank has again recommended the TUI share as a "Buy". The tourism group is on a solid growth path and is likely to reduce its operating loss significantly. The analysts, therefore, see the fair value of the TUI share at EUR 10.50. The share is currently trading at just under EUR 7.
The Plug Power share is likely to remain highly volatile in the future. The hydrogen pioneer simply cannot get its losses under control, and there is no sign of a profitable business model. In contrast, Carbon Done Right Developments is building an exciting platform in the area of emission certificates, and customers such as BP are providing confidence. As for TUI, it seems to be on an upward trajectory.
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