Solar stocks could outperform as analysts get bullish on the group.
That’s according to Matt Maley, equity strategist at Miller Tabak, who says the Invesco Solar ETF (TAN) and one of its holdings in particular could extend its climb.
“[First Solar] made a nice double bottom in March and May, and since then it made a higher high, and now more recently it made a higher low,” he said. “If we can follow that with another higher high above the $94 level, that’s going to be very bullish for the stock and [it’s] really going to gain a lot of upside momentum money into the name.”
First Solar fell slightly in early trading Wednesday to $92.22.
The TAN ETF climbed more than 3% on Tuesday, bolstered by upgrades on SolarEdge and First Solar. Analysts at Citi upgraded SolarEdge to a buy rating, while Guggenheim initiated coverage of First Solar with a buy rating.
The TAN is still down nearly 14% for the year, but Maley suggested there could be a turnaround coming for the group.
“All these stocks have a lot of potential here,” Maley said, adding that the TAN and First Solar could move “a lot higher here over the coming days.”
Delano Saporu, founder and CEO of New Street Advisors Group, offered another way to play the space.
“[It’s] not really a solar play, but I’m definitely looking at Renewable Energy,” Saporu said in the same interview.
“[It’s] trading at a nice valuation right now, about 31 times earnings, so, definitely not bad, definitely a cheap valuation for the company. And it’s actually showing positive price stock movement, up over 100% in the past year, which I think is a very strong trend for the stock.”
Renewable Energy closed nearly 1% higher on Tuesday and climbed early Wednesday.
Disclosure: Saporu owns shares of Renewable Energy.