Investors appear to be bullish on the solar sector, according to Roth Capital Partners analyst Philip Shen, who delivered an industry report on sustainability stocks on Friday.
Solar stocks have been relatively flat in 2023, with names like Jinkosolar (Jinkosolar Stock Quote, Charts, News, Analysts, Financials (NYSE:JKS), Canadian Solar (Canadian Solar Stock Quote, Charts, News, Analysts, Financials NASDAQ:CSIQ) and Solaredge Tech (Solaredge Tech Stock Quote, Charts, News, Analysts, Financials NASDAQ:SEDG) all neither gaining nor losing much ground in recent months.
One outlier would be First Solar (First Solar Stock Quote, Charts, News, Analysts, Financials NASDAQ:FSLR) which thanks in part to a good-looking quarterly results has delivered big time for shareholders.
Meanwhile, solar ETFs like Solar Invesco (Solar Invesco Stock Quote, Charts, News, Analysts, Financials NYSE:TAN) and GX Solar (GX Solar Stock Quote, Charts, News, Analysts, Financials NASDAQ:RAYS) are also flat.
But investor sentiment in residential solar and module stocks looks positive, according to Roth, who polled its investor base and, based on 42 respondents, found that more investors expect US resi solar to grow between five and ten per cent in 2023 versus Roth’s own view of the sector’s performance to be either flat or down.
“Investors appear to be bullish both NOVA and RUN with a greater bullish bias for NOVA. Between CSIQ & JKS, investors appear to favour CSIQ. MAXN has turned modestly bullish,” wrote Shen.
Shen spoke of looming interconnection and transmission issues that are expected to hit the industry, where utility scale solar in the United States, for example, will require serious transmission infrastructure reform to handle growth in the sector. Grid enhancing technologies are thought to help with transmission down the road, but the overall impact on solar stocks could be limited in 2023 and 2024, said Shen, with more an issue for projects scheduled in 2025 and beyond.
Below are four solar stocks from Roth’s coverage, with all projected returns listed as of the publication date of Roth’s report.
Stock: Sunnova Energy International (Sunnova Energy Stock Quote, Charts, News, Analysts, Financials NYSE:NOVA)
Roth Capital Rating: Buy
Roth Capital target price: $58.00
Projected 12-month return: 293 per cent
Stock: First Solar (First Solar Stock Quote, Charts, News, Analysts, Financials NASDAQ:FSLR)
Roth Capital Rating: Buy
Roth Capital target price: $220.00
Projected 12-month return: 7.6 per cent
Stock: Canadian Solar (Canadian Solar Stock Quote, Charts, News, Analysts, Financials NASDAQ:CSIQ)
Roth Capital Rating: Buy
Roth Capital target price: $55.00
Projected 12-month return: 45.1 per cent
Stock: Jinkosolar (Jinkosolar Stock Quote, Charts, News, Analysts, Financials NYSE:JKS)
Roth Capital Rating: Buy
Roth Capital target price: $70.00
Projected 12-month return: 49.2 per cent
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