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Wells Fargo turning positive on solar stocks in 2023 By Investing.com

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© Reuters. Wells Fargo turning positive on solar stocks in 2023

By Sam Boughedda

Wells Fargo analysts upgraded Sunrun (NASDAQ:), Sunnova Energy International (NYSE:), First Solar (NASDAQ:) to Overweight, and SunPower (NASDAQ:) to Equal Weight in a note to clients Friday, stating they are turning positive on clean energy in 2023.

“While continued Fed tightening in early 2023 will likely act as a near-term headwind, the fundamental and regulatory backdrop is much improved in 2023 and beyond,” said the analysts.

The analysts cited most regulatory overhangs being in the rearview mirror, underlying solid demand (especially in Europe), and legislative support from the inflation reduction act as the reasons for their more bullish stance.

They added that long-term tailwinds remain in place to support the accelerated deployment of clean energy, including government and corporate de-carbonization goals, ESG mandates, increasing grid instability, and rising utility rates.

“We favor solar over hydrogen due to solar’s better economics and strong underlying demand,” added the analysts. “The passage of IRA should drive accelerated adoption of solar and hydrogen in the U.S. for the next decade. Finally, several companies could benefit from large PTC payments over the coming decade from re-shoring of capacity.”

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