Renewable energy stocks
According to the International Energy Agency, global renewable electricity generation will increase by 8% this year and by more than 6% in 2022. (IEA). Renewables, on the other hand, are expected to fall short of demand, meeting only half of the expected growth in global demand this year and next, according to the agency.
According to Pearce Hammond, managing director of equity research at investment bank Piper Sandler & Co., this is creating an investment trend with renewables at its core.
Meanwhile, Julien Dumoulin-Smith, BofA Securities’ head of US power, utilities, and clean energy research, stated, “The (renewable energy) train has left the station.”
He stated that the transition to cleaner energy is “well underway and will accelerate.”
Here are some of their top sector stock picks:
Generac, a manufacturer of backup power generation equipment based in the United States, is a stock Hammond likes. Its stock is up more than 78 percent year to date. He claims that it has benefited from power outages in Texas and power outages in California, but it also has a renewable energy push.
Hammond emphasized the likelihood of a less stable grid in the future and argued that customer demand for more energy stability makes this stock appealing. He has an overabundance of the stock.
SunRun and Sunnova Energy are two companies that produce solar energy.
Grid concerns were also a factor in Dumoulin-decision Smith’s to go with SunRun and Sunnova Energy as residential solar panel providers. As a patchier grid becomes more likely as a result of extreme weather events, Dumoulin-Smith believes that many consumers will want to have their own energy sources that they can potentially resell to the national grid. “Consumers want dependability, and people want to be connected to the grid,” he added.
Hammond also chose Ameresco, a renewable energy equipment and services company that is up about 21% this year. Hammond appreciates that the company allows universities and others to improve the energy efficiency of their buildings and then split the savings that result from lower energy consumption.
NextEra Energy Partners is a subsidiary of NextEra Energy Inc.
NextEra Energy Partners, which is up about 20% so far this year, was chosen by both Hammond and Dumoulin-Smith. When it came to renewables, Hammond said the stock offered investors “lower risk.” Dumoulin-Smith also liked the stock because it is a leader in its industry.
NiSource Inc. is a company that specializes in the supply of
According to Dumoulin-Smith, Indiana’s utilities firm NiSource is one of the sector’s biggest success stories. He described earnings as exceeding expectations and predicted that they would accelerate further. The company announced last week that it expects to invest around $10 billion in capital through 2024, with an additional $2 billion for renewable energy generation.
Entergy, which provides energy to households in southern U.S. states, is another of Dumoulin-picks. Smith’s Its moves in sunnier parts of the United States, where authorities have recognized the need to modernize their energy sources, are a plus for the analyst. In fact, the company announced on Thursday that the Arkansas Public Services Commission had approved its plan for a new 100-megawatt solar power plant in Lee County, Florida.
The renewables industry as a whole
In a recent note, JPMorgan Chase stated that it had turned positive on the global alternative energy sector, citing a number of catalysts slated for the second half of this year that could drive the stocks higher.
These included easing raw material shortages, the Biden infrastructure plan, and the upcoming UN Climate Change Conference of the Parties (COP26).
Nonetheless, despite politicians and business leaders touting their commitment to the so-called energy transition, fossil fuel use is increasing, and the United States Energy Information Administration expects carbon emissions from energy-related sources to rise.
Best stocks reporting this week
Using data from Bespoke Investment Group, analysts identified several companies reporting earnings in the week beginning August 9 that typically outperform analysts’ expectations and rise after their reports.
According to Bespoke’s data, each of the stocks on this week’s list outperforms earnings per share estimates at least 80% of the time and has an average next-day gain of at least 1%.
Baidu, perhaps the most well-known name on the list, has a track record of exceeding earnings per share estimates 80 percent of the time.
According to UBS analysts, the “Google of China” could see a drop in ad demand in the second half of the year. Nonetheless, the firm maintains its buy rating on the stock, as stated in a note to investors on Friday. UBS stated that it sees progress in both the car and cloud industries. Online ad businesses, it added, may face some market-wide pressure in the near term, but have recovered from the pandemic’s negative effects.
Chegg, an edtech company, has lost about 7% of its value this year. However, the digital transformation of education is still in its early stages, and Chegg has the best business model in the sector, according to Jefferies analysts, who see potential 30 percent top- and bottom-line growth for the stock. According to Bespoke data, Chegg has historically outperformed earnings estimates 83% of the time.
CyberArk, an information security firm, has consistently outperformed earnings forecasts, and it is currently transitioning its business to a subscription model, which Wolfe Research estimates will double its customers’ lifetime value.
“The pandemic environment has accelerated the adoption of cloud technologies, significantly increasing the amount and rate at which privileged credentials can be created in the IT environment,” Wolfe analysts wrote in a note on Friday.
Jefferies upgrades Tesla
In a note to clients on Monday, analyst Philippe Houchois upgraded the stock to buy from hold, saying that Tesla was “leading the way on earnings momentum and capital allocation.” “Tesla is still leading innovation – Legacy [original equipment manufacturers] progress on EV powertrain and line-ups, but Tesla continues to build or maintain multiple edges, notably in product complexity, inventories, d
This year has been difficult for the stock, with legacy automakers seeing significant increases in share prices as they roll out their electric vehicle plans and lineups. According to Jefferies, this is a “healthy” correction, and the growing market for clean energy vehicles should benefit Elon Musk’s automaker.
Tesla sales figures from China have disappointed some analysts in recent quarters, but this has not translated into a drop in global demand for the brand, according to Jefferies.
“Despite temporary concerns about Chinese demand weakness, Tesla has been capacity constrained globally, with brand sales still dominating the chart and the company able to shift shipments to Europe when China turned temporarily weaker,” the note stated.
Jefferies raised its price target on Tesla from $700 to $850 per share. The new target is roughly 22% higher than the stock’s closing price on Friday. So far in 2021, the shares have changed little despite volatile movements.