AMRC - Ameresco rallies after UBS starts as new Buy after sharp YTD decline

2023-05-02 12:43:41 ET

Ameresco ( NYSE: AMRC ) +11.6% in Tuesday's trading after UBS initiated coverage of the renewable energy integrator with a Buy rating and $60 price target, after concerns over near-term growth headwinds have driven a 27% YTD decline in the stock, providing investors with an attractive entry point.

UBS sees Ameresco ( AMRC ) as "well positioned to capitalize on Inflation Reduction Act incentives given its wide-ranging offering of energy services and renewable power project development."

The company offers exposure to the ~10% compound annual growth rate Energy Service Company market with an increasing base of renewable energy assets providing recurring and relatively more stable earnings, UBS said.

Ameresco ( AMRC ) currently is rolling off a large battery project for SCE, which should cause a 26% Y/Y decline in project segment revenue this year, but UBS sees this as more of an opportunity, as the projects enhances the company's reputation as a provider of battery integration services.

More on Ameresco:

• See financial and valuation comparisons to sector peers
• SA analysis: Ameresco, A Fresh Look At Renewables Solutions
• Stock price return: 18% loss YTD, 12% loss in the past 12 months

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