3 Renewable Energy Stocks Wall Street Predicts Will Rally 60% or More
The renewable energy industry is expected to achieve robust growth thanks to favorable government policies to address climate change concerns. As such, we think renewable energy stocks Azure Power (AZRE),...
The renewable energy industry is expected to achieve robust growth thanks to favorable government policies to address climate change concerns. As such, we think renewable energy stocks Azure Power (AZRE), PowerCell Sweden (PCELF), and Beam Global (BEEM) could now be good additions to one’s watch list. Further, Wall Street analysts expect these names to rally 60% or more in price in the near term. Read on.
According to International Energy Outlook 2021, renewable energy will be the primary source of new electricity generation through 2050. Renewables’ share of energy consumption is set to grow from 15% in 2020 to 27% in 2050 due to falling technology costs and changing government policies, which will compel the electric power sector to use renewable energy sources to meet surging electricity demand.
Many countries have pledged to seek carbon neutrality under the Paris Agreement, which should bode well for the renewable energy sector. For example, President Biden has stated his goal is to achieve net-zero emissions economy-wide by 2050. The global renewable energy market is expected to reach $2 trillion by 2030, growing at an 8.4% CAGR from 2021 to 2030.
Given this backdrop, Wall Street analysts expect renewable energy stocks Azure Power Global Limited (AZRE), PowerCell Sweden AB (publ) (PCELF), and Beam Global (BEEM) to rally by more than 60% in the coming months. So, it could be wise to add these stocks to your watchlist now.
Azure Power Global Limited (AZRE)
Based in India, AZRE and its subsidiaries develop, construct, own, operate, maintain, and manage renewable energy projects. The company has 45 utility-scale projects with a combined rated capacity of 1,990 MWs.
On August 14, 2021, AZRE issued a $414 million green bond through Azure Power Energy Ltd, which bears a 3.375% coupon and will mature in 2026.The proceeds of the bond issue will be used to refinance an existing 5.5% $500 million Green Bond issued in 2017, which is due in 2022. The transaction is expected to reduce the company’s debt cost by 222 bps.
AZRE’s revenue increased 12.7% year-over-year to $59.70 million for its fiscal first quarter ended June 30, 2021. The company’s operating income came in at $38.10 million, up 10.7% year-over-year. Its net profit was $9.60 million, up 1,415.2% year-over-year. Its EPS came in at $0.19, up 1,672.5% year-over-year.
For its fiscal year 2023, analysts expect AZRE’s revenue to be $302.07 million, representing a 24.5% year-over-year rise. In addition, the company’s EPS is expected to increase 783.3% year-over-year to $0.53 in the next year. AZRE surpassed the Street’s EPS estimates in three of the trailing four quarters.
Wall Street analysts expect the stock to hit $34.88 in the near term, which indicates a potential 64.1% upside.
PowerCell Sweden AB (publ) (PCELF)
Based in Sweden, PCELF develops and produces fuel cells and fuel cell systems for automotive, marine, and stationary applications in Sweden and internationally. It also offers engineering services and zero-emission solutions.
On October 1, 2021, PCELF created a new business area to facilitate the transition to a hydrogen-electric solution. Richard Berkling, CEO, said, “This expands our position in the value chain and provides us with the opportunity of benefiting from valuable application data for continued development of new business and next-generation technology.”
For its fiscal second quarter, ended June 30, 2021, PCELF’s net sales increased 27.6% year-over-year to SEK28.16 million ($3.23 million). The company’s gross profit came in at SEK9.79 million ($1.12 million), up 118.3% year-over-year. Its tangible fixed assets were SEK34.37 million ($3.94 million) for the period ended June 30, 2021, versus SEK23.39 million ($2.68 million) in the year-ago period.
PCELF’s revenue is expected to be $30.19 million in its fiscal year 2022, representing a 103.2% year-over-year rise. Wall Street analysts expect the stock to hit $30.92 in the near term, which indicates a potential 99.4% upside.
Beam Global (BEEM)
BEEM is a San Diego, Calif.-based cleantech company that designs, develops, engineers, manufactures and sells renewably energized products for electric vehicle (EV) charging infrastructure, outdoor media and branding, and energy security products. Its product portfolio includes EV ARC and Solar Tree DCFC.
On August 12, 2021, BEEM announced that new patents were issued by the United States Patent and Trademark Office at the end of 2019, and in 2020 for its EV Standard and UAV ARC, which are expected to expand its product offerings with the same proprietary technology into new markets. The company has also been issued a new patent for its transformable EV ARC in China.
BEEM’s revenues increased 45.8% year-over-year to $2.12 million in the second quarter, ended June 30, 2021. Its total current assets came in at $30.35 million for the period ended June 30, 2021, compared to $29.9 million for the period ended December 31, 2020. Also, its total assets were $33.34 million, versus $32.9 million for the same period.
Analysts expect BEEM’s revenue to grow 110.7% year-over-year to $21.47 million in its fiscal year 2022. Likewise, its EPS is expected to grow 12.8% year-over-year in fiscal 2022.
Wall Street analysts expect the stock to hit $46 in the near term, which indicates a potential 77.3% upside.
AZRE shares were trading at $22.88 per share on Thursday morning, down $0.03 (-0.13%). Year-to-date, AZRE has declined -43.88%, versus a 19.01% rise in the benchmark S&P 500 index during the same period.
About the Author: Riddhima Chakraborty
Riddhima is a financial journalist with a passion for analyzing financial instruments. With a master's degree in economics, she helps investors make informed investment decisions through her insightful commentaries.
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