2 solar stocks to buy, 1 to sell


Supportive government policies and increasing installations of solar power units in residential and industrial areas have been driving the growth of the solar industry. But while most solar companies can overcome today’s supply chain challenges, some might struggle in the short term. So, Wall Street analysts recommend buying Sunnova Energy (NOVA) and FTC Solar (FTCI). But they fear that SunPower Corporation (SPWR) is in a downtrend. Let’s discuss.

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The recent passage of a $ 1.75 trillion infrastructure bill, which offers significant funding and tax credits for renewable energies and the electric vehicle (EV) industries, should bode well for the solar industry. The growing demand for solar power units for home and industrial use is expected to prompt solar companies to develop efficient photovoltaic panels, energy storage solutions and grid connected systems. The global solar energy market is expected to grow at a 20% CAGR to reach $ 200 billion by 2026.

While continued supply chain bottlenecks may affect industry output in the near term, increased government support should help the industry continue to grow. Investor interest in solar stocks is evident in the Invesco Solar Portfolio ETF (BRONZER) 14.3% returns in the last six months.

Against this background, Wall Street analysts recommend buying Sunnova Energy International Inc. (NOVA) and FTC Solar, Inc. (FTCI). However, they recommend that SunPower Corporation (SPWR) be avoided.

Shares to buy:

Sunnova Energy International Inc. (NOVA)

NOVA, in Houston, Texas, is a residential energy and solar energy storage service provider that provides operations and maintenance, monitoring, repair and replacement, equipment upgrades , optimization of the on-site power supply and diagnostics. It operates a fleet of residential solar energy systems with a generation capacity of approximately 790 megawatts.

On November 10, 2021, NOVA and Brinks Home announced an exclusive partnership that allows NOVA to offer options in the Brinks Home portfolio of smart home security solutions and allows Brinks Home dealers and authorized representatives to offer the suite. solar, battery and energy services from SUN. to their customers. Both companies are eager to expand the market for their products.

NOVA’s revenue for its fiscal third quarter, ended September 30, 2021, was $ 68.90 million, a 37.3% year-over-year improvement. The company had $ 408.16 million in cash as of September 30, 2021.

NOVA’s revenue is expected to grow 51% year-over-year to $ 242.82 million for the current year. The stock’s EPS is expected to grow at a rate of 113.4% per year over the next five years.

NOVA has won 26.3% of its prize in the past six months. The 10 Wall Street analysts who rated the stock rated it buy. The average price target of $ 57.10 for the stock indicates a Potential for an increase of 56.2%.

FTC Solar, Inc. (FTCI)

FTCI, based in Austin, Texas, provides solar tracking systems, technology, software, and engineering services internationally. The company serves project developers, owners of solar assets and engineering, procurement and construction (EPC) contractors who design and build solar energy projects.

On November 9, 2021, FTCI announced that it had been awarded a 504 megawatt DC, combined 260 megawatt AC power storage project in Arizona. FTCI will supply Voyager, its next-generation tracker producing improved energy yields, to Moss Solar, an EPC company that has been awarded a contract from a leading US developer to build the Solar Plus storage facility. FTCI is eager to expand its reach into the Arizona market.

The company had $ 140.66 million in cash as of September 30, 2021. Analysts expect FTCI’s revenue to improve 30.2% year-on-year to $ 243.83 million for the year. ‘current year. Over the past month, the stock has gained 7.5% in price. The four Wall Street analysts who rated the stock rated it buy. The average price target of $ 12 indicates a Potential for an increase of 37.1%.

Stock for sale:

SunPower Corporation (SPWR)

SPWR designs, manufactures and supplies solar panels and systems to residential, commercial and large-scale power plant customers around the world. The San Jose, California-based company also offers commercial roofs, carports, ground systems, and post-installation operation and maintenance services. In addition, it provides residential rental program services and sells inverters manufactured by third parties.

On October 5, 2021, SPWR acquired Blue Raven Solar, one of the world’s fastest growing residential solar energy providers. Blue Raven’s growth trajectory and complementary geographic footprint will allow SPWR’s advanced solar solutions to quickly reach the solar market and serve more customers in under-penetrated areas.

SPWR’s net loss amounted to $ 84.31 million for its fiscal third quarter, ended October 3, 2021, compared to $ 45.11 million in net income for the period of the previous year. Its net loss was $ 0.49, compared to EPS of $ 0.24 in the prior year period. The company had $ 268.57 million in cash as of October 3, 2021.

Analysts expect the stock’s EPS to decline at a rate of 66.5% per year over the next five years. The SPWR share price has fallen 3.9% over the past month. Of 11 Wall Street analysts who rated the stock, five rated it Sell. Average price target of $ 27.50 indicates a rate of 3.5% potential downside.

SPWR shares were unchanged in pre-market on Monday. Year-to-date, SPWR has gained 11.04%, compared to a 23.96% increase in the benchmark S&P 500 over the same period.

About the Author: Sweta Vijayan

Sweta is an investment analyst and journalist with a particular interest in researching market inefficiencies. She is passionate about educating investors so that they can be successful on the stock market.


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