Weakness is an opportunity with solar stocks. Granted, there have been concerns that a Trump presidential win could derail clean energy stocks. But as I’ve said before, a repeal isn’t likely for two reasons. First, unless the Republicans take full control of Congress, it’s not likely to happen. Second, the Inflation Reduction Act (IRA) has been popular across the political spectrum.
Not helping the reputation of solar stocks right now is the fact that SunPower (NASDAQ:SPWR) just filed for Chapter 11 bankruptcy protection. The company, once worth about $10 billion, just put an end to its 39-year-old business by filing in Delaware. Unfortunately, sky-high interest rates made up-front investments far too expensive and California has reduced solar incentives for property owners, so this outcome wasn’t a shock.
However, with all of this negativity priced into solar stocks, now is the time to buy the dip. Here are three of the top solar stocks you may want to jump into today.
First Solar (FSLR)
After catching strong support at around $195.27, First Solar (NASDAQ:FSLR) is just starting to pivot higher again. Last trading at $229.31, I’d like to see it initially retest $250 a share.
Analysts at Argus just raised their price target to $250 from $225, with a “buy” rating. The firm believes FSLR will benefit from evolving tariffs and other regulations regardless of who wins the election in November. Barclays also just raised its price target to $290 from $280 with an “overweight” rating on the stock.
Plus, earnings haven’t been too shabby. In its second quarter, the company’s net income soared year-over-year (YOY) to $349 million, or $3.25 a share, from $171 million, or $1.59 a share. Revenue rocketed 25% higher YOY to $1.01 billion.
As FSLR starts to break from consolidation, buy the stock.
Sunnova Energy (NOVA)
Weakness is also an opportunity for investing in Sunnova Energy (NYSE:NOVA). Currently trading at $7.60, I’d like to see it initially refill its bearish gap at around $12.
The company’s earnings per share (EPS) loss of 27 cents beat estimates by 32 cents. Revenue of $219.6 million, up 32% YOY, beat by $3.74 million. Adjusted EBITDA was $216.7 million from $28.1 million YOY. NOVA also raised its cash generation guidance to $100 million for 2024 to $350 million in 2025 and $400 million in 2026.
With that, analysts at Baird, Wells Fargo, Scotiabank and Piper Sandler raised their price targets on NOVA stock. Scotiabank, for example, raised its price target on NOVA to $14 from $10 with an “outperform” rating.
The firm added that “Results for Q2 are an excellent proof point of the strategy the company launched last quarter… For the long-term, the firm sees the potential for a more capital-light model as the company laid out in Q1,” as noted by TheFly.com.
Global X Solar ETF (RAYS)
If you want to diversify on the cheap in the solar sector, take a look at the Global X Solar ETF (NASDAQ:RAYS). Last trading at $9.85, I’d like to see it retest $12 in the near term.
With an expense ratio of 0.5%, the exchange-traded fund (ETF) invests in stocks involved with “solar power production; the integration of solar into energy systems; and the development/manufacturing of solar-powered generators, engines, batteries, and other technologies related to the utilization of solar as an energy source,” as noted by GlobalXETFs.com.
The fund has 49 holdings, and some of its top ones include First Solar (previously mentioned on this list), Enphase Energy (NASDAQ:ENPH), Sunrun (NASDAQ:RUN), SolarEdge Technologies (NASDAQ:SEDG), Jinko Power (NYSE:JKS) and Canadian Solar (NASDAQ:CSIQ). For investors who want to get into the solar sector without too much risk, this diversified ETF offers a nice opportunity.
On the date of publication, Ian Cooper did not have (either directly or indirectly) any positions in the securities mentioned. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
On the date of publication, the responsible editor did not have (either directly or indirectly) any positions in the securities mentioned in this article.
