UBS nearly doubles Ceres Power target to 970p as data centre demand drives royalty surge Proactive uses images sourced from Shutterstock
Shares in Ceres Power Holdings PLC (LSE:CWR, OTC:CPWHF), the clean energy technology group, jumped 17% to 779.3p on Friday after UBS raised its price target to 970p from 570p, citing a dramatic increase in expected royalty income from manufacturing partners.
The investment bank, which reiterated its buy rating, said it had increased its forecast for cumulative solid oxide fuel cell (SOFC) shipments by 60% to 1.8 gigawatts by 2030, delivering royalties of more than £100 million that year alone.
UBS said the upgrade was driven by channel checks with Ceres’s manufacturing partners and the read-across from Bloom Energy’s landmark 2.8 gigawatt order from Oracle, which demonstrated the scale of demand for fuel cell technology in powering data centres.
The broker now expects Delta Electronics, Ceres’s Taiwanese licensee, to reach 900 megawatts of capacity by 2030, up from a previous estimate of 515 megawatts, while Weichai Power of China is forecast to hit one gigawatt.
UBS noted that if Delta were to secure an order of similar scale to Oracle’s deal with Bloom, it could add roughly 7% to group revenue across 2027 to 2029.
The upgraded estimates lift group EBITDA forecasts by 31% in 2027 and 10% in 2028, with UBS now projecting positive free cash flow across 2026 to 2028.
The bank described 2026 as an inflexion year for EBITDA breakeven, with operating costs set to fall 20% year on year following a restructuring that has reduced annual cash burn to approximately £20 million.
UBS said it has increasing confidence that Ceres will secure a new licensing partner in 2026, noting that the company’s pipeline of prospective partners has grown fivefold over the past year.
The US remains a gap in the licensing network, though Delta and Doosan can access the American market from their existing bases.
At its current share price, UBS calculates that the market is pricing in only around six gigawatts of cumulative SOFC shipments, which it called conservative against a total addressable market of 22 gigawatts per year by 2030 estimated by Ceres.
The bank’s valuation puts Ceres at 10 times 2030 EV/EBITDA, a 44% discount to closest peer Bloom Energy on 18 times.
In its upside scenario of £12 per share, UBS models two new licence partners joining by 2027, higher royalties and stronger growth in data centre orders.
The downside case of 400p assumes no new partners, no royalty revenue in 2027 and a higher cost of capital.
UBS also values Ceres’s green hydrogen electrolysis business at £2.60 per share, representing additional upside it says is not currently reflected in the share price.