Solar stocks could outperform as analysts turn bullish on the group.
That’s according to Matt Maley, an equity strategist at Miller Tabak, who says the ETF Invesco Solar (TAN) and one of its holdings in particular could prolong its ascent.
“You are looking at both First Solar and the TAN ETF and they both have a lot of upside potential,” Maley said on CNBC’s “Trading Nation” on Tuesday.
“[First Solar] had a nice double dip in March and May, and since then it’s peaked higher, and now more recently it’s hit a higher trough, “he said.” If we can keep up with it. that with another higher high above the $ 94 level this is going to be very bullish for the stock and [it’s] will really earn a lot of money on the upside in the name. “
First Solar edged down early Wednesday to $ 92.22.
ETF TAN climbed more than 3% on Tuesday, supported by upgrades on SolarEdge and First Solar. Citi analysts upgraded SolarEdge to a buy note, while Guggenheim kicked off the First Solar cover with a buy note.
The TAN is still down nearly 14% for the year, but Maley suggested there could be a turnaround ahead for the group.
“All of these stocks have a lot of potential here,” Maley said, adding that TAN and First Solar could go “much higher here over the next few days”.
Delano Saporu, founder and CEO of New Street Advisors Group, offered another way to play space.
“[It’s] not really a solar game, but I’m definitely looking at renewables, ”Saporu said in the same interview.
“[It’s] is trading at a good valuation right now, about 31 times earnings, so definitely not bad, certainly cheap valuation for the company. And that actually shows a positive price movement, up over 100% over the last year, which I think is a very strong trend for the stock. “
Renewables closed up nearly 1% on Tuesday and climbed early Wednesday.
Disclosure: Saporu owns shares of Renewable Energy.