This one may be in a league of its own. Tesla Inc. (NASDAQ: TSLA) owns the lion’s share of electric vehicle sales in the United States, and its soaring stock price has been one of the big stories of the year. Next month, the company is hosting a Battery Day, at which Tesla is expected to discuss its goals for battery storage for renewably generated electricity. This kind of storage is a key part of Biden’s plan for the U.S. power sector
Tesla closed at $1,835.64 on Monday, after posting a new 52-week high of $1,845.86. The 52-week low is $211.00, and the consensus price target is $1,290.18. At the closing price, Tesla stock trades at nearly 30% above its price target, and its multiple to expected 2021 earnings is 118 times. The company does not pay a dividend.
Enphase Energy Inc. (NASDAQ: ENPH) makes devices known as microinverters that attach to each module of a solar panel and convert direct current to alternating current. The company also makes monitoring and control software for solar installations. As solar installations proliferate in the next decade, Enphase is expected to benefit from the expansion.
Shares closed Monday at $75.06, in a 52-week range of $17.18 to $76.75 and with a price target of $74.43. The stock trades very near its 52-week high and is fully valued based on its price target. The company pays no dividend, and the stock traded at a multiple of 45 to Enphase’s expected 2021 earnings.
This is an Israel-based maker of direct current inverter systems for solar energy systems. SolarEdge Technologies Inc. (NASDAQ: SEDG) is also involved in other solar industry segments, including lithium-ion cells and batteries and storage systems. SolarEdge actually performed somewhat better than Enphase in the second quarter on demand for its products from non-U.S. customers.
The stock closed at $219.33 on Monday. The 52-week range is $67.02 to $229.49 and the price target is $167.08. SolarEdge, too, has outrun its price target, by about 24%, while trading just 4% below its 52-week high. The company does not pay a dividend and the stock traded at about 45 times expected 2021 earnings.
Brookfield Renewable Partners
Bermuda-based yieldco Brookfield Renewable Partners L.P. (NYSE: BEP) owns and operates some 19 GW of renewable generating in all parts of the world. Some 7,900 MW of that generating capacity comes from hydroelectric dams, 5,200 MW from wind power, 2,500 MW from solar energy, 2,700 MW of pumped hydro and battery storage and 800 MW of distributed generation through its investment in TerraForm. While it is unlikely that new hydropower projects will be part of Biden’s plan, maintaining the hydroelectric plants and upgrading their connections to the grid are mentioned.
Shares closed Wednesday at $43.81, in a 52-week range of $24.05 to $46.13. The consensus price target is $35.63. At the current share price, Brookfield is overvalued by about 19%, but the firm’s dividend yield is 4.00% and the stock trades at a multiple of just 9.4 to its expected 2021 earnings.
NuScale Power is not traded publicly but we include a word about it here because it offers a promising new nuclear power technology called small module reactor (SMR). Each NuScale SMR can generate 60 MW of electricity and up to 12 SMRs can be connected in a single facility to generate 720 MW of power. Construction firm Fluor Corp. (NYSE: FLR) is NuScale’s majority and lead strategic investor. Biden’s clean energy plan draws attention specifically to “advanced nuclear reactors, that are smaller, safer, and more efficient at half the construction cost” of traditional nukes.