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(Bloomberg) — Ceres Power Holdings Plc extended a blistering rally this week, pushing one-year gains close to 1,000% as surging optimism around fuel cell technology drives the stock to multi-year highs.
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Shares in the Horsham, West Sussex–based group have jumped 22%, set for a third consecutive week of double-digit gains, lifting its market value to about £1.2 billion ($1.6 billion).
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Sentiment jumped after US peer Bloom Energy Corp. raised its full-year outlook above expectations, while Goldman Sachs Group Inc. increased its price target to a Street-high 670 pence on stronger revenue forecasts and improved manufacturing assumptions.
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The rally reflects a broader rebound in clean energy stocks, as the Iran conflict sharpens focus on energy security and rising demand from AI and electrification drives investment in power and grids. A UBS Group AG basket of European renewable energy shares has climbed 30% this year.
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This week’s gains leave Ceres trading at about 20 times one-year forward sales — roughly in line with Bloom Energy, but a steep premium to the renewables basket’s 1.7 times.
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Goldman Sachs analyst Michele Della Vigna highlighted faster-than-expected solid oxide fuel cell ramp-up signals from Weichai Power Co., which holds exclusive manufacturing rights for Ceres’ SOFC technology in China. He also pointed to Bloom Energy’s deal with Oracle Corp. to deploy fuel cells as primary power in data centers — replacing gas turbines — as further evidence of strengthening demand.
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Ceres shares were already supported earlier this month by the launch of Endura, a new solid oxide platform, which enables both power generation and green hydrogen production. Jefferies, one of seven brokers tracked by Bloomberg with buy-equivalent ratings, said the product materially strengthens the company’s commercial proposition.
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A short squeeze may also be fueling the rally. Shares on loan — a proxy for short interest — stood at 5.8% as of Thursday, according to S&P Global Market Intelligence. It was above 10% earlier this month.
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Still, Ceres’s valuation looks stretched to some, with Peel Hunt LLP rating the stock a sell.
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“The share price increasingly reflects an acceleration in commercial scale, royalty income and cash generation that, in our view, exceeds near-term execution visibility,” analyst Sam Wahab said in emailed comments.
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—With assistance from Michael Msika.
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English (US)