With President Joe Biden now in the White House, solar stocks could see brighter days
With President Joe Biden now in the White House and Democrats in control of Congress, solar stocks could explode to higher highs. All could easily see even more brighter days ahead under a Biden administration.
Remember, Biden has said the U.S. will rejoin the Paris Climate Accord. He’s also laid out a $2 trillion clean energy and infrastructure plan, with hopes for net zero emissions by 2050.
In addition, Biden has said he wants to “upgrade 4 million buildings and 2 million homes over four years to meet new energy efficiency standards,” as noted by The Conversation.
In addition, the solar investment tax credit was just extended at 26% for another two years. From there, it’ll drop to 22% by 2023, and to 10% by 2024.
With that, here are some of the top solar stocks you may want to consider.
- SunPower (NASDAQ:SPWR)
- Invesco Solar ETF (NYSE:TAN)
- First Solar (NASDAQ:FSLR)
- SolarEdge Technologies (NASDAQ:SEDG)
- Enphase Energy Inc. (NASDAQ:ENPH)
Solar Stocks to Buy: SunPower (SPWR)
The last time I weighed in on the SunPower stock, it traded at $19.80. That was on Nov. 10. Today, it’s up to $37.44 and could run to $50 under Biden.
From here, the rollout of the vaccine, and higher demand for renewable energy could have a positive impact. In addition, according to a 2019 Pew Research Center survey, 6% of U.S. homeowners have already installed solar panels. Up to 46% say they have considered adding solar power to their homes, as well.
Plus, according to Earth 911, there will be continued momentum toward solar adoption, especially with prices dropping and likely incentives.
Morgan Stanley is just as bullish on the SPWR stock. Analyst Stephen Byrd raised his price target to $27 from $12.50 with an equal weight rating. Piper Sandler analyst Kashy Harrison also raised his price target on the stock to $35 a share.
Invesco Solar ETF (TAN)
One of the best ways to diversify a green portfolio is with an ETF, such as TAN. Not only does this ETF give investors exposure to related stocks, such as Enphase Energy, SolarEdge Technologies, First Solar, and SunPower, it does so at less cost.
For example, if you were to buy 10 shares of every listed stock, it would cost thousands of dollars. But with this ETF you can gain exposure at just $115 a share.
Since pulling back to $47.93 in September, the ETF hit a recent high of $123.66. It has since pulled back to $115, where it appears to have found solid support. From here, I’d like to see the ETF closer to $150 a share with patience.
First Solar (FSLR)
First Solar is another hot solar name to consider. Since bottoming out in September around $60, it has since exploded to $102. I’d like to see it closer to $125 moving forward based on the above-mentioned solar catalysts.
In addition, late last year, Roth Capital analyst Philip Shen raised his price target to $110 from $100 after the solar company posted a strong third quarter beat. Q3 revenue of $928 million easily beat estimates for $683 million.
Cowen analyst Jeffrey Osbourne raised his target on FSLR to $100 from $85 last year, as well.
SolarEdge Technologies (SEDG)
SolarEdge has been just as explosive. Since bottoming out around $180 in September, the SEDG stock ran to a high of $377. After a pullback to $298, I’d use weakness as a buy opportunity, as SEDG becomes oversold.
The only reason the stock pulled back was because Tesla (NASDAQ:TSLA) launched a solar inverter, a market dominated in part from SolarEdge.
Again, use the pullback as opportunity. Along with the solar inverter, SEDG is also investing in energy storage, EV charging and grid power solutions. In addition, in its third quarter earnings report, the company said e-Mobility team will soon deliver full powertrain solutions for assembly in electric vehicles by the fourth quarter.
Analysts seem to like the stock here, too. Truist Securities analyst Tristan Richardson for example initiated coverage with a buy rating, and a target of $435. “We like Enphase’s long-term fundamental outlook on growth in residential solar, its core target market for its microinverter solutions,” he noted.
Piper Jaffray’s Harrison also raised his price target on the stock to $340 a share.
Enphase Energy (ENPH)
In addition, you may want to consider Enphase Energy.
Since bottoming out in September around $70, the ENPH stock ran to $200. From here, I’d like to see it closer to $250 a share also on the above-mentioned catalysts.
ENPH also pulled back on Tesla’s solar inverter news. However, Bank of America analyst Arc Li said investors should still be comfortable buying it here. In fact, he believes Tesla is not a threat at this time.
Goldman Sachs’ analyst Brian Lee just reiterated a buy rating with a $232 price target. Piper Jaffray’s Harrison also raised his price target to $211. Truist Securities’ Richardson initiated coverage with a buy rating with a $254 target. “We like Enphase’s long-term fundamental outlook on growth in residential solar, its core target market for its microinverter solutions,” noted Richardson.
Note: This article originally appeared at InvestorPlace.
On the date of publication, Ian Cooper did not have (either directly or indirectly) any positions in the securities mentioned in this article. Ian Cooper, an InvestorPlace.com contributor, has been analyzing stocks and options for web-based advisories since 1999.