2023-07-20 14:05:26 ET
The recent rally in Sunnova Energy International Inc ( NYSE: NOVA ) is just a drop in the bucket compared to where this stock is headed, says Mayank Maheshwari – a Senior Analyst at Morgan Stanley.
Sunnova shares should be worth $42
On Thursday, Maheshwari recommended buying the clean energy stock and said it had upside to $42 – a 90% premium on its current price.
The analyst is convinced that Sunnova shares will benefit as solar power continues to get cheaper. His research note reads:
As electricity consumption grows 10% faster than GDP, we estimate demand for clean power will double to account for nearly half of the world’s electricity requirements by 2030.
Sunnova will report its Q2 results next week. Consensus is for it to lose 42 cents a share versus 32 cents per share a year ago.
Inflation Reduction Act could help Sunnova
Note that the Houston-headquartered firm could benefit from Biden’s Inflation Reduction Act as well that includes a 10-year extension on the solar tax credit.
Maheshwari likes Sunnova shares because he expects solar and onshore wind to be about 35% cheaper on average versus fossil fuels by the end of this decade.
With increased competitiveness over fossil fuels, clean power will metamorphose the electricity landscape, overtaking fossil-based generation by 2030.
Strong demand for the residential solar systems will help this clean energy stock hit new milestones over the next twelve months, he concluded. The Morgan Stanley analyst also recommended buying New Fortress Energy Inc today in which he sees upside to $50 per share.
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