The election of Donald Trump has revived speculation about the future Clean energy stocksEspecially in the solar field. With a Republican-controlled White House and a likely GOP majority in Congress, investors are eyeing potential changes to the Inflationary Reduction Act (IRA), which has been critical in driving clean energy growth. The Invesco Solar ETF, a key barometer for solar stocks, has fallen more than 7% this month and is down 35% year-to-date, reflecting market concerns about the outlook for the sector.
Adding to the pressure is fear that Trump’s policies, such as tax cuts and tariffs, could reignite inflation, which, combined with already high interest rates, has created a tough environment for clean energy companies. While these challenges have weighed heavily on solar stocks, they may also open the door for opportunistic investors to look for undervalued names in 2018-19. Sector.
Why Solar Stocks Can Still Shine
Despite concerns, clean energy may retain support under the Trump administration. A significant portion of the Inflation Reduction Act’s benefits, about 75%, went to Republican districts, prompting some GOP lawmakers to advocate preserving its stimulus. Additionally, Elon Musk, a Trump supporter and clean energy advocate, could influence policies to maintain or adapt key incentives, rather than eliminate them.
2 solar stocks to consider
First Solar: A Global Leader in Advanced PV Solar Solutions
First solar today
(as of 11/27/2024 06:05 PM ET)
- 52-week range
- $135.88
▼
$306.77
- P/E ratio
- 16.59
- Price target
- $279.04
First Solar NASDAQ: FSLR is a global leader in photovoltaic (PV) solar energy solutions, specializing in advanced thin-film PV modules and large-scale solar power plants. The company has been instrumental in driving the adoption of utility-scale solar energy worldwide. Known for its strong Financial healthFirst Solar maintains a solid balance sheet, evidenced by a current ratio of 2.14, and has effectively managed costs to maintain profitability and impressive margins.
In Q3 2024, the first solar Reported Revenue of $887.7 million, a 10.7% year-over-year increase, though its EPS of $2.91 missed analyst estimates by $0.19. Despite sector headwinds, First Solar’s The valuation looks attractive After a sharp 27% decline in the last six months. The stock now trades at a P/E ratio of 15.67, with a forward P/E of just 8.85, suggesting potential value compared to its strong earnings growth of 41% over the past five years. These metrics highlight a compelling risk-reward profile for long-term investors.
Analysts certainly think so. Based on 27 analyst ratings, the stock has a Moderate buy rating Buy with 24 analyst ratings. Specifically, the stock’s consensus price target of $280.50 predicts a full 53.5% upside potential.
Invesco Solar ETF: Diversified Exposure to the Solar Industry
Invesco Solar ETF Today
(as of 11/27/2024 ET)
- 52-week range
- $33.79
▼
$54.62
- Dividend yield
- 0.12%
- Property under management
- $872.80 million
For investors seeking diversified exposure to the solar industry, Invesco Solar ETF NYSE: TAN Offers an attractive option. Tracking the MAC Global Solar Energy Index, TAN provides a comprehensive investment in a number of solar-focused companies, including solar energy equipment manufacturers and service providers.
The global diversification of ETFs includes approx 50% exposure to US companieswith additional holdings in areas such as Israel, Germany, and the Cayman Islands. It is worth mentioning holdings Included are industry leaders such as First Solar, NextTracker, Enphase Energy, and Sunrun. With $842 million in assets under management and an average daily trading volume of 1.2 million shares, TAN offers a stable, liquid, and diversified approach to investing in the long-term growth potential of solar energy.
Opportunity in the midst of uncertainty
Market reaction to Trump’s election has been swift and negative for solar stocks, but the selloff could provide an opportunity to buy quality names at discounted prices. With bipartisan gains from the IRA and influential voices like Elon Musk favoring clean energy, the sector’s long-term prospects may remain intact, even in a changing political landscape.
Before considering the Invesco Solar ETF, you may want to hear this.
MarketBeat keeps track of Wall Street’s top-rated and best-performing research analysts and the stocks they recommend to their clients on a daily basis. MarketBeat has identified Five stocks That top analysts are quietly telling their clients to buy now before the broader market hits… and the Invesco Solar ETF was not on the list.
While Invesco Solar ETF currently has a “Hold” rating among analysts, top analysts believe these five stocks are better buys.
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