Since the Russian invasion of Ukraine began on February 24, shares of seven alternative energy stocks have added between 23% and 55% to their share prices. The not-so-good news for investors is that before Putin’s war, just three of these stocks traded in the green for the past 12 months, and all still trade well below yearly highs posted in the first half of November. Talks between Ukrainian and Russian officials are set to begin on Thursday.
While Putin’s war is pushing share prices higher now, it remains to be seen if the gains will last. November’s high prices were the result of expectations that the U.S. government would invest some $250 billion over 10 years. Congress failed to approve the investment when it rejected the president’s Build Back Better proposal. President Biden has not given up, however, and called in his State of the Union message for more investments and tax credits to “double America’s clean energy production in solar, wind, and so much more …”
In Europe, the United Kingdom has joined the United States in banning imports of Russian oil, and Germany has ditched its conservative spending habits and committed to spending €200 million on renewable energy over the next decade. The European Union has accelerated deployment of solar energy and could add nearly 50% to its solar capacity in 2022 alone.
The short-term gains in solar energy stock prices could stretch further into the future if U.S. and E.U. intentions become reality. Here is a look at five alt energy companies that are benefitting now and could become longer-term winners as well.
Enphase Energy
With a market cap of some $23.7 billion, component maker Enphase Energy Inc. (NASDAQ: ENPH) is the largest company in our watchlist of solar stocks. The company’s principal product is a microinverter that converts solar energy from direct to alternating current at the individual module level, and it couples that with technology to monitor and control solar-generated power.
Thirteen of 27 analysts covering the stock have given it a Buy rating and another six rate the shares at Strong Buy. The median price target on the stock is $227, implying a gain based on a recent price of nearly $180 of 26%. When Enphase reported results earlier this month, it beat earnings estimates by 23% and revenue estimates by about 3.3%.
Revenue is forecast to rise by 45% in 2022, 30% in 2023 and 20% in 2024. Forecast adjusted earnings per share (EPS) are tabbed to rise by 31% in 2022, 30% in 2023 and 25% in 2024.
The stock’s 52-week trading range is $108.88 to $282.46, and total shareholder return for the past year is 19.7%. Since February 23, the Enphase Energy stock price has jumped 41.5%.
SolarEdge
Another component maker for the solar industry, SolarEdge Technologies Inc. (NASDAQ: SEDG) makes and sells direct current inverter systems and other solar-related products, including electricity storage systems. Its current market cap is around $17.5 billion, and its share price has increased by 40.7% since February 23.
Analysts are mostly bullish on the stock, with 17 of 24 giving the shares a Buy or Strong Buy rating. Five others rate the stock at Hold. The median price target on the stock is $328, below the trading price of about $333. Based on a high price target of $432, the upside potential is about 30%.
Revenue is forecast to rise by 44% in 2022, 23% in 2023,and 12% in 2024. Forecast adjusted earnings per share (EPS) are tabbed to rise by 42% in 2022, 34% in 2023 and 11% in 2024.
The stock’s 52-week range is $199.33 to $389.71, and total shareholder return for the past year is 19.2%.
First Solar
Of the solar panel makers, First Solar Inc. (NASDAQ: FSLR) is the largest, with a market cap of around $8.4 billion. The company designs, makes and sells solar modules to system integrators and solar power systems operators. First Solar also offers a full range of services to get new solar power plants built and operating.
Due to pricing pressure for solar modules, analysts are more cautious, with 15 of 22 giving the stock a Hold rating and only five rating the shares at Buy or Strong Buy. At a share price of around $79, the stock trades above its median price target of $76.75. At the high price target of $120, the upside potential is 52%.
Revenue is forecast to dip by 13% in 2022, rise by 29% in 2023 and rise by 22% in 2024. First Solar is expected to post a loss per share of $0.47 in 2022, before reporting EPS of $2.13 in 2023 and $4.62 in 2024.
The stock’s 52-week range is $61.24 to $123.13, and total shareholder return for the past year is 3.5%. Since February 23, the stock price has jumped 22.5%.
Sunrun
Sunrun Inc. (NASDAQ: RUN) designs, sells and installs residential solar energy systems in the United States. The company also offers battery storage and sells its services directly to consumers. The company’s market cap is currently around $6.4 billion.
Analysts are mostly bullish on the stock, with 17 or 21 rating the shares at Buy or Strong Buy. Another three have a Hold rating. At a share price of around $31, the upside potential based on a median price target of $47 is about 52%.
Revenue is forecast to rise by 14% in 2022, 13% in 2023 and 13% in 2024. Sunrun is expected to post a loss per share of $0.08 in 2022, before reporting EPS of $0.07 in 2023 and $0.14 in 2024.
The stock’s 52-week range is $18.61 to $64.62, and total shareholder return for the past year is negative 42.6%. Since February 23, the stock price has jumped 54.3%.
Bloom Energy
Fuel cell system provider Bloom Energy Corp. (NYSE: BE) has a market cap of around $4.2 billion and an enterprise value of about $5.2 billion. The company designs, manufactures and sells solid-oxide fuel cell systems for on-site power generation. Since February 23, Bloom Energy’s share price has increased by about 41%.
As with Sunrun, analysts are mostly bullish on Bloom Energy. Of 18 brokerages covering the stock, 10 have Buy or Strong Buy ratings. The rest have a Hold rating on the stock. At a share price of around $24, the upside potential based on a median price target of $28 is 16.7%. At the high price target of $36, the upside potential is 50%.
Bloom Energy’s revenue is forecast to rise by 17% in 2022, 32% in 2023 and 27% in 2024. The company is expected to post a loss per share of $0.26 in 2022, before reporting EPS of $0.23 in 2023 and $0.70 in 2024.
The stock’s 52-week range is $12.55 to $37.01, and total shareholder return for the past year was negative 12%.
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