Buy this energy generation stock that can benefit from Trump's tax bill, says JPMorgan

JPMorgan upgraded Bloom Energy to Overweight from Neutral, raising its price target to $33 from $18, implying 36% upside, due to the company's expected benefit from new 48E tax credits for fuel cells under President Trump's recently signed tax and spending bill (OBBB). Analyst Mark Strouse anticipates this, combined with elevated gas turbine pricing, will drive upside to consensus revenue and margin estimates from FY26 and increase order activity. The firm also highlighted Bloom's current valuation at approximately 15x FY26E EV/EBITDA as a discount to historical multiples, expecting expansion as order visibility improves. Bloom Energy shares reacted positively, jumping over 6% in premarket trading.

Analysis

JPMorgan has upgraded Bloom Energy (BE) to Overweight from Neutral, increasing its price target to $33 from $18, which implies a potential 36% upside. The primary catalyst for this upgrade is the unexpected qualification of fuel cells for 48E tax credits under a newly signed federal bill, which JPMorgan anticipates will drive upside to consensus revenue and margin estimates starting in fiscal year 2026. This legislative tailwind is amplified by a favorable competitive environment where gas turbine pricing and lead times remain elevated, potentially accelerating customer adoption of Bloom's solid oxide fuel cells. The firm highlights an attractive valuation, noting that BE trades at approximately 15x FY26E EV/EBITDA, a significant discount to its one-year historical NTM multiple of ~18x and three-year average of ~22x. JPMorgan expects this valuation gap to close as new orders increase visibility into future growth. While the stock reacted positively to the news, jumping over 6% in premarket trading, it is crucial to note that analyst sentiment is sharply divided, with half of the 24 covering analysts rating the stock as a Hold or Underperform.

Key Decisions for Investors

• Investors may consider the JPMorgan upgrade a signal to re-evaluate Bloom Energy, as the new 48E tax credits provide a significant, tangible catalyst for future revenue and margin expansion.
• The stock's current valuation at a discount to its historical multiples presents a potential entry point, but this opportunity is contingent on the company converting the legislative tailwind into concrete order growth, which must be monitored closely.
• Given the evenly split analyst consensus, investors should conduct thorough due diligence to understand the risks highlighted by the twelve bearish or neutral analysts, weighing them against the bullish case presented by JPMorgan.