Walmart Agreement Highlights Counterparty Concerns and Capital Constraints, Reinforcing Sell Rating on Plug Power

Analyst Ameet Thakkar from BMO Capital maintained a Sell rating on Plug Power and keeping the price target at $1.30.

Ameet Thakkar has given his Sell rating due to a combination of factors tied to Plug Power’s financial condition and the revised agreement with Walmart. He interprets the new licensing and escrow arrangement as Walmart putting a safety net in place that would allow it to continue operating its material handling fleets if Plug Power were to face severe financial distress, including bankruptcy or major operational failures. The agreement’s provisions for qualifying alternative stack suppliers and granting Walmart more flexibility in sourcing equipment and services suggest to him that a key customer is actively reducing its dependence on Plug Power. Thakkar views this as a sign that counterparties are increasingly concerned about the company’s long‑term reliability despite some recent progress on cash burn and customer fleet expansion.

In addition, Thakkar points out that while Walmart’s decision to terminate up to 42 million warrants eases some overhang from potential future dilution, it does not solve Plug Power’s broader capital structure issues. He notes that the company is already effectively at or above its authorized share limit, even after the warrant cancellation, and has not reserved shares for recent warrant and convertible issuances. The upcoming special shareholder meeting to double the authorized share count to 3.0 billion shares underscores, in his view, the continued reliance on equity issuance to fund operations and avoid a reverse split. Taken together, these factors reinforce his cautious stance and support maintaining a Sell rating on the stock.