20-Year Pro Trader Reveals His "MoneyLine"
Ditch your indicators and use the "MoneyLine". A simple line tells you when to buy and sell without the guesswork. It’s a line on a chart that’s helped Nic Chahine win 83% of his options buys. Here's how he does it.
Morgan Stanley analysts have issued their outlook on the clean tech sector, offering an overview of 2023 and projecting trends into 2024.
4 Themes Affecting Clean Energy Valuations In 2024
Analysts Andrew S Percoco and David Arcaro outlined four key themes that they believe will affect clean energy valuations into 2024. After the substantial sell-off in clean tech stocks in 2023, here’s what Percoco and Arcaro believe will dominate the clean tech sector in 2024.
- Interest Rates and Clean Energy Valuations:
- If interest rates decrease, there is a possibility of significant enhancement in the valuations of clean energy.
- Deflation Impact on Clean Energy Technologies:
- The deflation of core clean energy technologies may help counterbalance the impact of high interest rates, although the mitigation might be less substantial than initially expected.
- Election Cycle Effects on Clean Energy:
- While the repeal of the Investment Tax Credit (IRA) doesn’t seem probable, the presence of anti-IRA rhetoric could create a lingering concern for the clean energy sector.
- Profitable and Low-Risk Growth in Clean Energy:
- Companies that demonstrate both profitability and low-risk growth, coupled with clear demand visibility, are expected to outperform their counterparts until there is a decrease in interest rates and macroeconomic uncertainties subside.
For the clean tech sector as a whole, the analysts maintain their ‘Attractive’ industry view of Clean Tech. . They predict more than 10 years of vigorous growth in renewables, supported by IRA legislation and favorable renewable energy economics.
Read: Clean Energy Battle: Plug Power’s Hydrogen Economics Against Bloom Energy’s Strong Underlying Demand
Sub-Sector Considerations
Within the clean tech space, analysts looked at the various sub-sectors and shared their view for 2024.
- Residential solar may experience a pull forward in rates, potentially increasing the value of long-duration portfolios.
- Large-scale solar may face challenges in supply chain, permitting, and financing.
- Battery storage growth may be solidified by improved economics from commodity deflation and global oversupply.
- Onshore wind reinvestment continues, but growth is expected to slow until 2025.
- Offshore wind development pipeline issues may persist into 2024.
Stock Considerations
Given the optimism they hold for the sector, Morgan Stanley upgraded First Solar Inc (NASDAQ:FSLR) to Overweight. The price target for FSLR stock was increased from $214 to $237 per share, offering a 64% upside.
Other high-conviction Overweight-rated stocks in the U.S. Clean Energy space highlighted by Morgan Stanley were NextEra Energy Inc (NYSE:NEE) and The AES Corp (NYSE:AES), Bloom Energy Corp (NYSE:BE) and Altus Power Inc (NYSE:AMPS).
Underweight-rated picks from the space included Plug Power Inc (NASDAQ:PLUG), SunPower Corp (NASDAQ:SPWR).
Clean tech companies with the most downside per Morgan Stanley’s assessment included Shoals Technologies Group Inc (NASDAQ:SHLS) and Array Technologies Inc (NASDAQ:ARRY).
Read Next: 80% Of The Cars On The Road Will Be EVs In Less Than 10 Years, Tom Steyer Says
Photo: Shutterstock
20-Year Pro Trader Reveals His "MoneyLine"
Ditch your indicators and use the "MoneyLine". A simple line tells you when to buy and sell without the guesswork. It’s a line on a chart that’s helped Nic Chahine win 83% of his options buys. Here's how he does it.
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