02:23 PM EDT, 03/14/2024 (MT Newswires) -- Ballard Power Systems ( BLDP ) this morning said the Hydrogen and Fuel Cell Technologies Office within the US Department of Energy advised the company's applications for two grants totaling US$40 million under the Clean Hydrogen Electrolysis, Manufacturing, and Recycling Program have been selected and recommended for negotiation of financial awards. Net of the grants, BLDP should invest roughly $160 million through 2027E. The company expects to reach FID on the project later this year, which should benefit from access to the Gulf Coast hydrogen hub, that could receive up to $1.2 billion in government funding.

National Bank also notes that Ballard finished Q4 with $751 million in cash and the company has made headway on multiple cost reduction initiatives, where it now expects to be gross margin positive by Q4'24E. "With a large war chest and improving gross margins," it should have multiple years of runway before capital becomes a constraint, an attribute that is relatively unique in the hydrogen industry, analyst Rupert Merer writes.

While the sector has been challenged over the last year, the outlook for Ballard is improving as it continues to make prudent decisions to drive future growth, he adds.

Maintain US$4.50/sh, Outperform/Speculative rating.

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