Jefferies starts First Solar, Enphase stocks at buy ratings
Analysts at Jefferies late Thursday announced the start of their alternative-energy stock coverage, bestowing upon First Solar Inc. (FSLR), Enphase Energy Inc. (ENPH), and SunRun Inc. (RUN) stocks buy ratings. In times of "uncertainty we see better risk/reward for companies with exposure to utility-scale, strong backlog and balance sheets," the analysts said. They rated the stocks of SunPower Corp. (SPWR) and Array Technologies Inc. (ARRY) as hold. Catalysts for the sector heading into next year include more clarity on Inflation Reduction Act provisions and the "stabilization" of interest rates, the analysts said. Alt-energy and particularly solar-power stocks have significantly underperformed this year, thanks to macroeconomic factors such as the higher interest rates and regulatory changes in states such as California that have increased payoff times for solar power. Among the buy-rated stocks, First Solar is a top pick, "as it meets our key criteria including strong backlog ... supportive pricing in a declining pricing environment, strong balance sheet," and gross margins going to about 25% in 2025 from 18% this year, the analysts said.
-Claudia Assis
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12-14-23 1720ET
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