Bullishness has been coming back for FuelCell Energy (NASDAQ:FCEL) in recent weeks. But the real jump starter for FCEL stock is the $1 trillion infrastructure bill just passed by Congress. Things are certainly looking up for the company.
While only a small sliver of it is going toward hydrogen projects, this funding will go a long way to boost demand for the fuel cell power plants this company builds and installs. This significant piece of federal legislation is on top of other state-level legislation that also bodes well for FuelCell.
Put it all together, and its not just hope and hype that’s helping shares to continue their rebound in price.
Now, a full move back to the multi-year high FCEL stock hit last in February ($29.44 per share) may still be a challenge. And as of right now, it doesn’t seem likely that we’ll see an encore of the mania for “green wave” stocks seen in late 2020 and early 2021.
Still, as things overall are moving in the right direction here, investors may want to consider picking up some FuelCell Energy shares.
The Latest With FCEL Stock
Investors have already begun to price in the potential upside from this legislative package into clean energy plays. That enthusiasm comes even before President Biden has had a chance to sign the infrastructure bill into law.
However, I wouldn’t say that the above-mentioned bill is fully factored into the FCEL stock price just yet. Unlike last winter, when speculators were not only “buying the rumor,” but “buying the news,” as well, the reaction to the spending bill has been quite muted.
That may be disappointing for traders who bought it ahead of the bill passage, predicting an even higher spike in price. But for investors looking at it as more of a long-term play? This may be an encouraging sign. Better yet, is the fact other demand boosters are not fully factored into its stock price, either.
As I mentioned previously, two U.S. states: California and Connecticut, have signed into law legislation that will help incentivize the construction of new hydrogen fuel cell plants. This latest federal and state-level support for hydrogen energy won’t immediately translate into substantially higher revenue for the company but it’s a good start.
Keep in mind that, despite the big moves FCEL stock has made in the past, subsequent moves higher from here may happen much more slowly.
A Full Rebound Will Take Time
Prospects may be improving for FuelCell Energy stock. Assuming the situation continues to improve, it definitely stands to add to its recent gains. Yet it may be a stretch to say that it has a shot of quickly making its way back to where it was in February 2020 ($25-$30 per share).
Well, the bubble-like conditions seen in late 2020, and early 2021 have come and gone. Today, investors have more of a “show me” attitude toward clean energy stocks. They’re no longer satisfied by the mere fact a company is operating in this industry. They want to see either major developments, or improved financial results, before sending a “green wave” play to higher prices.
Fortunately, this is happening with FuelCell.
For example, earlier this month, the company extended its deal to provide an oil and gas giant with carbon capture technology. This helped put a few points into shares. Then, back in September, it reported quarterly revenues well above analyst expectations, and lower losses than projected. This too also positively affected its share price.
As more positive news trickles in, FCEL stock stands to see a further gradual uptick in price. For impatient traders, this may be bad news. But for patient investors, approaching this the right way, the possible upside from the rise of hydrogen as a fossil fuel alternative could be well worth the wait.
The Verdict on FCEL Stock
Last month, the situation with FuelCell Energy was already looking promising. Now, with the passage of the infrastructure bill, its prospects are looking even brighter.
The caveat? The next big move for this stock may not be around the corner. I wouldn’t count on it making a giant leap back to $20 or $30 per share. It may instead take time for it to complete a full recovery in price.
So, after its recent run-up, what’s the best move? As its latest rally wraps up, it may be worth it to buy FCEL stock ahead of the next bit of news that will propel it higher.
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