Jefferies analysts have recently initiated coverage of alternative-energy stocks and have assigned buy ratings to some prominent companies in the sector. First Solar Inc. (FSLR), Enphase Energy Inc. (ENPH), and SunRun Inc. (RUN) have all been marked as strong investment options. The analysts believe that during times of uncertainty, companies with exposure to utility-scale operations and robust financial positions present better risk/reward profiles.
While SunPower Corp. (SPWR) and Array Technologies Inc. (ARRY) have been given hold ratings, the analysts foresee positive factors that could drive growth in the sector next year. These factors include gaining more clarity on the provisions of the Inflation Reduction Act and the stabilization of interest rates.
It’s worth noting that alt-energy stocks, particularly within the solar-power segment, have struggled this year due to macroeconomic factors such as higher interest rates and regulatory changes in states like California, which have extended the payback period for solar power installations.
Among the stocks with buy ratings, First Solar stands out as a top pick according to the analysts. The company fulfills several key criteria including a robust backlog, supportive pricing despite a declining market, and a strong balance sheet. Furthermore, it is projected to achieve gross margins of around 25% by 2025, up from 18% this year.
The Jefferies analysts’ coverage of alternative-energy stocks provides valuable insights for investors looking to navigate this evolving sector. With their expertise and analysis, investors can make informed decisions while capitalizing on the potential growth opportunities offered by companies embracing renewable energy solutions.
