Eco-Friendly Earnings: 3 Renewable Energy Stocks Set to Outperform


  • The U.S. is making progress toward its ambitious climate change target.
  • First Solar (FSLR): It is seen as a major beneficiary of growing demand for clean power.
  • Quanta Services (PWR): The company recently boosted its full-year forecast, citing strong power demand.
  • Fluence Energy (FLNC): Analysts have lifted ratings on the company’s attractive valuation and increasing software revenue.
Renewable Energy Stocks - Eco-Friendly Earnings: 3 Renewable Energy Stocks Set to Outperform

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A recent report highlighted a significant investment boost in U.S. wind and solar power plants last year, fueling optimism for renewable energy stocks. Despite this, the investment levels still fell short of meeting the country’s ambitious climate targets.

This analysis was conducted by experts from Princeton University, MIT, Rhodium Group and Energy Innovation. It examined the U.S.’s efforts toward achieving a 40% reduction in greenhouse gas emissions by 2030. That is a key objective of President Joe Biden’s Inflation Reduction Act. Challenges such as permit delays, grid connection issues and equipment shortages are hindering the deployment of large-scale renewable energy projects.

However, electric vehicle (EV) sales are on track, bolstered by significant tax incentives under the same act. Although a slowdown from last year’s 50% increase in EV sales is expected, a continued growth rate of 30% to 40% is projected to be adequate for meeting climate goals.

Additionally, zero-emission electricity generation and storage saw a 32% increase last year, achieving 32.3 gigawatts. However, to stay on target for 2030, the U.S. needs to significantly accelerate clean energy installations.

This backdrop sets the stage for examining three renewable energy stocks positioned to capitalize on these substantial investments aimed at reducing greenhouse gas emissions.

First Solar (FSLR)

First Solar logo on smartphone in front of computer screen with graphs. FSLR stock
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First Solar (NASDAQ:FSLR) is a leading American manufacturer of solar panels and provider of utility-scale photovoltaic (PV) power plants. FSLR primarily serves the renewable energy sector, with a significant focus on large-scale solar projects globally. 

Investing in First Solar is particularly attractive due to the growing demand for clean energy. Its innovative technology and strong market position are expanding within the solar energy market. The company’s performance has positively influenced the broader renewable energy stocks. Shares in solar companies, including First Solar, surged recently in anticipation of new tariffs on Chinese solar panels. Additionally, increasing power demand and federal subsidies are contributing to the sector’s growth.

Also, First Solar surged following a report from UBS. It identified FSLR as a major beneficiary of the growing electricity consumption by data centers, which are increasingly used for artificial intelligence (AI) applications. The report suggests that the company’s market position could lead to further gains amid the rising demand for solar energy.

Quanta Services (PWR)

Environmental technology concept. Picture of mountains with icons of infrastructure on top of it. Infrastructure stocks.
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Quanta Services (NYSE:PWR) is a premier infrastructure solutions provider for the electric power, oil and gas, and telecommunication industries. Its products and services are critical to the modernization and expansion of utility infrastructure. 

Investing in Quanta Services is compelling due to its diverse service portfolio. It exhibits a profound presence in the renewable energy and EV infrastructure sectors, and the increasing demand for upgraded energy and communication networks.

Recently, the company announced an increase in its full-year revenue forecast. Now, it anticipates a revenue range of $22.5 billion to $23.0 billion. This shows a bump up from the earlier estimate of $22.25 billion to $22.75 billion. And, the revised forecast surpasses the consensus estimate of $22.59 billion. Furthermore, in Q4 of 2023, Quanta Services saw its consolidated revenues rise to $5.78 billion from $4.42 billion the previous year.

Despite the boost in revenue expectations, the company’s free cash flow forecast remains unchanged. Projections are still set at $1.30 billion to $1.70 billion, aligning with the market estimate of $1.51 billion.

For Q1, PWR reported an adjusted earnings per share (EPS) of $1.41, an increase from $1.24 year-over-year (YOY), and above the analyst estimate of $1.30. Also, the reported EPS rose, reaching 79 cents compared to 64 cents in the same period last year.

In response to these strong financials, Argus has increased the price target for Quanta Services shares. It went to $310 from the previous target of $285, while maintaining a buy rating. The firm’s confidence in Quanta is rooted in its role as a key provider of infrastructure solutions for several critical industries. Those include electric power, oil and gas, communications, and renewable energy sectors.

Fluence Energy (FLNC)

FLNC stock. Concept of renewable energy battery storage system in nature. 3d rendering
Source: petrmalinak /

Global leader Fluence Energy (NASDAQ:FLNC) specializes in energy storage and digital applications for renewables. Fluence Energy’s products include advanced battery storage systems and software platforms for energy management. 

Many investors see Fluence Energy as a promising investment. This is due to the accelerating shift toward renewable energy, the growing need for energy storage solutions to support grid stability and the company’s innovative technology and strong market position.

Recently, Fluence Energy stock gained following a rating upgrade from Raymond James (NYSE:RJF). It led to outperform from market perform, amid a broader reassessment of clean energy stocks.

The sector has been particularly sensitive to interest rate concerns, which have reignited over the past quarter. This led to a decline in clean tech stocks even as other market segments have shown gains.

The upgrade is attributed to the company’s increasing software revenue and what Raymond James views as substantial multiple compression. This compression is seen as providing the potential for upside surprises in the company’s stock value.

On the date of publication, Shane Neagle did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the Publishing Guidelines.

Shane Neagle is fascinated by the ways in which technology is poised to disrupt investing. He specializes in fundamental analysis and growth investing.

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