Bloom Energy Downgraded to Sell by Redburn Atlantic, Target Price Cut 31%

Redburn Atlantic has lowered its target price for Bloom Energy (BE.US) from $14.50 to $10 and downgraded its rating from "neutral" to "sell." The firm expressed concerns about the company's outlook, stating that the current valuation is overly optimistic and does not adequately reflect the underlying risks.

Analyst Skye Landon noted that despite a recent decline in Bloom Energy's stock following U.S. tariff policies, the company's valuation remains high. Landon highlighted that the risk/reward profile is skewed to the downside due to uncertainties about the company's ability to meet market earnings expectations.

Landon also predicted that product sales levels may decrease as there are concerns about the long-term ability of fuel cells to compete with traditional power generation sources for market share. While Landon believes that Bloom Energy's revenue target of $1.65 billion to $1.85 billion for the fiscal year 2025 is achievable, he cautioned that backlog orders or transferred orders could result in approximately $700 million in non-recurring revenue.

Looking ahead to the 2027-2030 fiscal years, Landon's projections are 33% lower than the average estimate. For the 2024-2030 fiscal years, the market consensus is for a compound annual growth rate of approximately 20%, while Landon's more conservative estimate is around 8%.

Landon added that new fuel cell competitors are expected to enter the market in the second half of 2025, which could exert additional pressure on Bloom Energy's international operations. This development, coupled with the existing uncertainties, further supports Redburn Atlantic's decision to downgrade Bloom Energy's rating and lower its target price.