Ceres Power's Rally Derailed as Analyst Warns of Factory Capacity Mirage

Ceres Power fell 10% after Panmure downgraded from buy to sell, warning market cap implies 1.7GW while partners committed only 400MW by 2030.

Ceres Power's shares plunged roughly 10% to €7.75 on Friday, capping a week that has wiped a fifth from the stock's value. The trigger was a sharp downgrade from Panmure Liberum, which cut its rating straight from "buy" to "sell" even as it nudged the price target up to 590 pence. The broker argued that the market has priced in production volumes that bear little resemblance to what the fuel-cell company's partners are actually planning.

At the heart of the sell call is a glaring mismatch. Ceres Power's current market capitalisation of around £1.4 billion implies an installed production capacity of 1.7 gigawatts. Yet the company's partners have committed to only 400 megawatts by 2030 — less than a quarter of that figure. Panmure warned that the valuation has decoupled from industrial reality, and the risks are only compounded by operational hiccups on the factory floor.

Those risks are already visible at Doosan Fuel Cell, a key collaborator. The South Korean manufacturer's production yield slipped below 50% at times in 2025 before recovering to 80% in the first quarter of 2026. Such delays directly hit Ceres Power's licensing-based revenue model, given its asset-light strategy of relying on partners like Bosch, Shell and Doosan to build and commercialise the technology. The company has no factories of its own, leaving management with limited control over the speed of scale-up.

Despite Friday's rout, the stock still trades far above its long-term average. The 200-day moving average sits at €3.92, meaning the current price is nearly double that level. Even after the pullback, the shares have gained 214% since the start of the year, though that is down from last week's year-to-date peak of 249%. Over a 12-month horizon, the equity had at one point surged 852% before the recent reversal.

Volatility remains extreme, with an annualised figure of 143% against a relative strength index of 53.4 — neutral territory but offering little comfort given the stock's sensitivity to news flow. The next major catalyst comes in September, when Ceres Power will publish its first-half results. Investors will be looking for tangible proof that partnerships in data-centre power and green hydrogen can justify the multiples.

For now, the downgrade has punctured the euphoria. The stock now sits roughly 18% below its all-time high, and the gap between market enthusiasm and the slow grind of industrial deployment has never looked wider.