These are great ways to play solar energy.
Over the next seven years, Bank of America estimates energy storage costs will decrease by 50%, ushering in the next phase of the global transition to renewable energy. The firm estimates the energy storage market could grow 16% annually from 2020 to 2031 and continue to expand to $58 billion by 2040. Those projections may seem aggressive, but solar energy costs alone are on track to drop 70% from 2010 to 2020. Here are seven renewables, batteries and electrification stocks to buy to play the coming energy storage boom, according to Bank of America.
Sunrun (ticker: RUN)
Sunrun finances, installs and services U.S. residential solar installations. The majority of its installations are leased by customers. Analyst Julien Dumoulin-Smith says Sunrun has limited downside given its fundamental valuation, even based on conservative estimates for costs and deployments. Dumoulin-Smith says refinancing opportunities and preventative electrical outages in California during wildfire season could drive further market penetration. Sunrun recently reaffirmed its full-year 2019 guidance for between 16% and 18% deployment growth and net present value of $1.15 per watt. Bank of America has a “buy” rating and $25.50 price target for RUN stock.
Vivint Solar (VSLR)
Vivint is another U.S. leader in residential solar installations, leasing the majority of its panels to customers. Vivint shares recently traded below $6.60 even though Dumoulin-Smith says Vivint’s PowerCo assets alone are worth about $7.30. He says Vivint shares are not pricing in long-term, attractive-margin growth prospects and a favorable low interest rate environment. Dumoulin-Smith says Vivint is well-positioned to capitalize on the next solar upgrade cycle triggered by a spike in electricity demand, potentially driven by electric vehicles. Bank of America has a “buy” rating and $14 price target for VSLR stock.
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