Renewable energy ‘doesn’t shine’ as Citi cuts six stock price targets (NASDAQ:CSIQ)

VioNettaStock/E+ via Getty Images

Price targets are slashed for six renewable energy companies by Citi analyst JB Lowe, saying the sector is being weighed down by “the four-headed monster” of rising inflation, a rotation from growth stocks to value stocks, the sabotage of the Build Back Better legislation and changes to solar incentives in California.

Based on lower EBITDA multiples for 2023, Lowe is reducing PTs by approximately 20% for Enphase Energy (ENPH -1%), first solar (FSLR -1.4%) and SolarEdge Technologies (SEDG -0.2%) to $205 from $255, $80 from $100, and $310 from $385, respectively.

Canadian Solar (CSIQ) -0.7%) is now Lowe’s top sector pick while lowering its price target to $40 from $46 as the analyst expects margins to rise with polysilicon costs falling significantly as the offer will be added to the market at the end of 2022 and in 2023.

Lowe also sees Canadian Solar raise significant funds through the IPO of its subsidiary CSI Solar which will be used to invest in next-generation cell and module capacity.

Analyst also lowers Generac’s price targets (GNRC +0.8%) to $375 from $475 and Chart Industries (GTLS +0.7%) to $167 instead of $198.

According to reports this week, the Biden administration is considering a plan that would maintain Trump-era tariffs on solar energy imports, but exclude imports of bifacial panels.

Karen J. Nelson