Ceres Power Holdings PLC (LSE:CWR, OTC:CPWHF) fell 7% to 320p on Thursday after Peel Hunt downgraded the fuel cell technology developer to 'sell' from 'hold', arguing the shares reflect an overly optimistic view of the company's long-term growth prospects.
The broker raised its discounted cash flow-based target price from 190p to 200p following forecast revisions but said the stock's current valuation, at 14.3 times its 2026 revenue estimate, priced in a timing of cash returns and investment plans that it did not believe was justified.
Peel cut its 2026 revenue estimates after Ceres guided to contracted revenue of approximately £45 million for the year before any new business activity, which the broker said fell short of prior expectations.
The note also pushed back on market enthusiasm surrounding Ceres's collaboration with energy company Centrica, saying the chief executive had confirmed that any near-term revenue from the partnership would be "modest", suggesting recent excitement around the deal was premature.
Ceres Power, which develops solid oxide fuel cell and electrolyser technology used in clean energy applications, published its preliminary full-year results late last month.