Investing.com -- JP Morgan upgraded Bloom Energy (NYSE: BE ) to Overweight from Neutral and raised its price target to $33 from $18 due to an unexpected boost from the reinstatement of federal tax credits for fuel cells under the Big Beautiful Bill.
The inclusion of fuel cells under the 48E investment tax credit, which takes effect in 2026, should improve Bloom’s pricing power and drive higher demand, particularly from data centers and more price-sensitive customers.
The credit, which previously excluded fuel cells under revised definitions, had been a key policy uncertainty until recently.
JP Morgan expects the credit to accelerate revenue and margin growth beginning in fiscal 2026, lifting full-year EBITDA estimates to $420 million on $2.21 billion in revenue.
That compares with prior expectations of $275 million and $2.04 billion, and is above consensus.
“We believe the tax credit should provide pricing power for BE in conversations with data centers, while also increasing demand from more price sensitive (non-data center) customers,” the note said, adding that rising gas turbine prices and long lead times could push hesitant buyers to commit.
While Bloom could see some order delays this year as customers wait for the 2026 incentive, JP Morgan expects the company’s tone on its second-quarter call to be more upbeat than peers now that the policy is in place.
It noted, however, that uncertainties around implementation and the absence of a permanent CFO remain risks.
Shares are trading at about 15 times of EBITDA forecast, below both the company’s one-year average multiple of 18 and its three-year average of 22.
The brokerage sees room for valuation to expand as Bloom secures additional orders and earnings visibility improves.