Ceres Power Shares: Down 17% in the Last Week, Analyst Cuts to Neutral

Ceres Power (LON: CWR) shares are down around 17% in the last week, not helped by a recent ratings downgrade from an analyst at Goldman Sachs.

The investment bank cut the stock from Buy to Neutral in a recent note, citing a significant surge in its share price this year.

“We move to Neutral from Buy on Ceres following its recent share-price outperformance relative to the rest of our clean hydrogen coverage,” analysts at Goldman Sachs said in the note.

The stock has gained around 40% year-to-date, a contrast to the broader trend among European electrolyser and fuel cell peers, which have seen average declines of about 20%.

Goldman Sachs highlighted that Ceres' share-price performance has led to a premium valuation.

“The stock's YTD strong share-price performance leaves it with an above-average valuation vs. peers, trading at 7.1x 2025E EV/Sales vs. 6.4x for the group (a 10% premium),” the bank stated.

Despite the downgrade, Goldman Sachs acknowledged Ceres' strong business momentum. The firm highlighted the company's achievements this year, noting that “Ceres is well-positioned thanks to the commercial acceleration observed in 2024 with three major license deals announced so far this year, indicating strong business momentum and enhancing visibility on the company's revenue outlook.”

The analysts believe that while Ceres has built positive momentum, the valuation premium now limits the stock's upside potential, prompting the change in rating.