3 Renewable Energy Stocks to Buy Now: Q3 Issue

Renewable energy stocks have performed poorly over the past few years, as the sector’s financial results have been weighed down by high interest rates and inventory issues. But a look at the bigger picture shows that the sector has grown quite quickly and is poised to continue doing so in the future.

In fact, the amount of renewable energy added globally last year increased by 50% compared to 2022. And respected consulting firm Wood Mackenzie predicts that outside of China, a massive annual average of 85 gigawatts of wind power will be added globally over the next decade. Over the past decade, the ten-year average was just 37 gigawatts.

In February, Reuters Agency reports that “the growing desire for data storage is driving energy demand in the U.S. and creating new opportunities for solar and wind developers.” Indeed, data center operators typically want to buy “a reliable, low-emissions power source at a competitive cost.” It’s no wonder that many technology companies are buying large amounts of energy generated by solar and wind.

For investors looking to capitalize on these strong trends, we’ve put together a list of three renewable energy stocks worth buying now.

GE Vernova (GEV)

GE Vernova (NYSE:GEV), which makes wind turbines, is well-positioned to benefit from the growing demand for wind power. The company will also get a big boost from the global need to build new power plants and upgrade electrical grids as renewable energy sources are used more and demand for electricity grows. As such, GE Vernova is one of the best renewable energy stocks to buy right now.

Morgan Stanley agrees with my thesis. In May, the investment bank wrote that the company’s “(electrical) equipment and services offerings” would enable it to benefit from rising demand for electricity, the need for more reliable power grids and global efforts to reduce carbon dioxide emissions.

GE Vernova’s renewables business, dominated by its wind turbine business, is expected to break even this year after losing $1.44 billion in 2023 and $2.24 billion in 2023, respectively. Analysts forecast the renewables business to be profitable in 2025.

The company’s grid electrification business, which offers transformers, switchgear and other electrical equipment, is expected to get a big boost as demand for electricity grows, driven by the electrification of transportation and the proliferation of massive data centers.

Enphase Energy (ENPH)

Wall Street’s two largest banks, Barclays and Goldman Sachs, have issued very optimistic notes Enphase Energy (NASDAQ:ENPH) stock from April. Solar panels use Enphase microinverters.

In April, Barclays raised its rating on the stock from “equal weight” to “overweight.” The bank expects demand for Enphase inverters to grow and was bullish on the stock’s valuation. Barclays raised its target price on the stock from $115 to $134.

Goldman Sachs placed ENPH shares on its U.S. “doomsday watch” in June. The bank expects the company’s revenue to increase as a result of stockpiles of its products in California. Goldman also predicts the company’s financial results will improve due to increased demand for home batteries.

In another sign that Wall Street is becoming more bullish on the stock, Enphase’s stock price surged nearly 25% between July 2 and July 12.

First Solar (FSLR)

In May, Swiss bank UBS identified First Solar (NASDAQ:FSLR) as a play on the spread of artificial intelligence.

More specifically, UBS expects First Solar to benefit from the increased electricity consumption of big tech companies in the AI ​​era. They promise to offset any fossil fuels they use with equivalent purchases of renewable energy. UBS also predicts that First Solar’s ​​share of the U.S. market will continue to grow in the future.

The U.S. Energy Information Administration projects that solar power use in the U.S. will increase by 75% between 2023 and 2025. First Solar’s ​​revenues are likely to increase if it increases its share of the fast-growing sector.

Analysts are predicting the company’s revenue will grow 36% this year and another 25% in 2025. Their average estimate is for First Solar’s ​​earnings per share to rise to $13.59 and $21.38 in 2024 and 2025, respectively, from just $7.74 in 2023.

Strong growth and an optimistic outlook make First Solar one of the best renewable energy stocks to buy right now.

On the date of publication, Larry Ramer held a long position in GEV. The opinions expressed in this article are the author’s own, subject to the InvestorPlace.com Publishing Guidelines.

On the date of publication of this article, the editor in charge did not hold (directly or indirectly) any interests in the securities referred to in this article.