Ceres Power Holdings PLC (LON:CWR) has had its target price hiked to 540p from 300p by analysts at Liberum as the broker said the company’s fuel cell technology could be a ‘game changer’ for electrolysis power generation.
The broker, which rates Ceres at ‘buy’, said the AIM-listed firm’s plans to develop an electrolysis cell capability “make a lot of sense” as it was an area where “durable, low cost and high efficiency cells offer key advantages”.
READ: Ceres Power broker hikes valuation; likens it to another UK technology success story
“Only two private companies, Sunfire (Germany) and Haldor Topsor (Baillie Gifford) are active currently and neither has Ceres Generation 3 technology which in fuel cells contributes to greater stack durability and strength and a lower materials bill. Currently [solid oxide electrolysers] are relatively high cost and have poor reliability so Ceres technology could be a game changer”, Peel Hunt said.
Analysts also highlighted that the firm had “strong commercial backing” for its fuel cell technology and predicted that it will “have over £100mln net cash by year end” thanks to investments from strategic investors including Chinese bus maker Weichai and German engineering giant Bosch.
“The fact that Ceres has two license partners now as major strategic investors does not guarantee commercial success but suggests strong commercial backing”, Liberum said.
Ceres shares were 1.8% lower at 415.6p in late-morning trading on Thursday.