Companies and Brands

Why Piper Sandler Is Pumping the Brakes on These 3 Solar Stocks

Chris Lange

Published: July 27, 2022 9:42 am

Energy prices have been on the rise this year. Russia has put the clamps on Europe, and countries, companies and consumers are looking for alternatives. While everyone is looking to figure out the oil and gas markets, one Wall Street player is looking at something entirely different.

Piper Sandler has issued a few calls with a focus on the solar industry. Each call is moderately positive, forecasting slight upside in both the near and long term. However, there are concerns within the industry about uncertainty in the economy at large.

Kashy Harrison was the lead analyst on the call and noted that with President Biden’s Build Back Better now twice rejected, renewable investor focus will return to evaluating stocks under a “recessionary lens.” Broadly, project lead times within the sector suggest less risk for 2022 expectations with more risk manifesting next year.

Entering 2023, Harrison believes U.S. utility-scale solar could prove “relatively more resilient” and U.S. residential solar growth will decelerate. He remains optimistic in regard to Europe’s demand for non-Russian energy supply. Within this “uncertain economic environment,” Harrison is biased toward balance-sheet strength and companies with potential for favorable long-term earnings revisions.

It is important to remember that no single analyst report should be used as a sole basis for any buying or selling decision.

FTC Solar, Inc. (NASDAQ: FTCI): Piper Sandler upgraded to a Neutral rating from Underweight and raised the price target to $3.50 from $2, implying downside of 1% from the most recent closing price of $3.55. The stock traded around $4 on Wednesday, in a 52-week range of $2.11 to $11.54. Shares are down over 48% year to date.

Sunnova Energy International Inc. (NYSE: NOVA): Harrison downgraded to a Neutral rating from Overweight and cut the price target to $23 from $27, implying upside of 16% from the most recent closing price of $19.73. Sunnova stock has a 52-week trading range of $12.47 to $46.40, and it traded near $18 share on Wednesday. The stock is down 34% year to date.

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Sunrun Inc. (NASDAQ: RUN): Piper Sandler downgraded to a Neutral rating from Overweight and cut the price target to $29 from $35, implying upside of 19% from the most recent closing price of $24.33. The stock traded around $23 on Wednesday, in a 52-week range of $16.80 to $60.60. Shares are down more than 35% year to date.