An analyst from Deutsche Bank is bullish on
Enphase Energy,
Sunrun,
and
First Solar
due to their strong domestic presence amid new U.S. legislation.
Deutsche Bank analyst Corinne Blanchard initiated coverage of Enphase (ticker: ENPH),
Sunrun
(RUN), and
First Solar
(FSLR) with Buy ratings and 12-month price targets of $330, $36, and $180, respectively. Blanchard has confidence in the future of these stocks due to their exposure to the U.S. markets after the passing of the Inflation Reduction Act.
The act, which was signed into law in August, gives homeowners and other buyers of solar energy substantial tax credits to incentivize the move toward cleaner energy.
“We initiate broadly on the Clean Tech industry, launching coverage on six solar
companies, with a Bullish view supported by an acceleration in government support including the recently passed Inflation Reduction Act,” Blanchard wrote in a research note. “This favorable regulatory environment and improving incentive support should help further boost demand for the solar industry.”
Blanchard added that the U.S. solar market has much room for growth, with only about 4% of the total addressable market currently using solar panels. She believes that in 10 years, about 15% of the market will be penetrated, driven by increased costs of utilities, declining solar costs, and benefits from the Inflation Reduction Act.
Shares of Sunrun were up 6.7% in recent trading, while Enphase climbed 2.6% and First Solar rose 2.1%.
Blanchard also initiated coverage of
SunPower
(SPWR) and
SolarEdge
(SEDG) with Hold ratings and price targets of $16 and $260, respectively. For
SunPower,
Blanchard has concerns over the company’s exposure to new-home construction, where headwinds and softness are expected into 2023. For
SolarEdge,
supply-chain issues and cost pressure on foreign exchange and shipping have put Blanchard on the sidelines, for now.
Write to Angela Palumbo at angela.palumbo@dowjones.com
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