After much analysis and maceration of the electoral debate between Donald Trump and Kamala Harris, most polls place the Democratic candidate as the winner of the first and probably only confrontation between the two candidates for the presidency of the United States of America. The market has also made its decision. Even if no verdict can be drawn from the stock market as a whole Wall Street after this debatethe sector related to Renewable energy reacts higher after Harris’ imposition on Trumpbecause of the greater proximity of the Democratic discourse to investment in green energy.
Polls still don’t show a clear winner in the race for the White House’s Oval Office. But since Kamala Harris succeeded Joe Biden, Democrats have a better chance of coming out on top in the vote that will take place in just eight weeks. According to the RealClearPolitics survey, which cross-references data from all major surveys published in the United States, Harris takes a point and a half over Donald Trump after televised confrontation.
Investors believe that the Democrats’ victory and the fulfillment of their promises could give wings to the renewable energy sector. Thus, the market came to buy shares of manufacturers, installers or distributors of clean energy listed on Wall Street. The Nasdaq Clean Edge Green Energy Index, weighted by 56 companies in the sector, rebounded by more than 5% since last Tuesday. But there are companies that even triple that mark in the same period, like First Solar.
To this day, analyst firms continue to argue that a Harris victory would lead to greater tax pressure on publicly traded companies if Democrats ultimately raise the corporate tax rate to 28%. On the other hand, a victory for Donald Trump would trigger a trade war with China If he keeps his word, he will increase new tariffs on products entering the United States, which would affect the growth of the global economy, as Barclays pointed out. But it is not all bad news, regardless of the 48th president of the United States.
Kamala Harris’ victory would also bring millions of dollars in grants and aid for renewable energy projects across the country that would continue the green heritage Biden’s Inflation Reduction Act and his promotion of clean energy. In fact, Trump said cancel budgeted but unspent money on climate laws and funding projects to end what he calls “the Democrats’ new green scam.”
That’s why stocks of green energy companies on Wall Street have skyrocketed, allowing the company that produces photovoltaic modules, First Solar, advance of more than 16% Since last Wednesday, Sunrun is up nearly 15% over the same period. Even electric vehicle company Tesla, owned by Elon Musk who was the Republican candidate’s closest friend, rose 6% after the debate.
The renewable energy sector has been through some complex years globally. After a few years in which high electricity prices brought great benefits to the industry, the stage of high financing costs (due to rising interest rates in half the world) have limited the arrival of investments, increased their debt ratios and reduced their attractiveness on the stock market. Chinese competition is also affecting prices, as is the case with high inventory levels of photovoltaic modules in the face of low demand. For example, the Nasdaq Green Companies Index is down almost 60% from its historic highs in 2021.
Green Energy References on Wall Street
Despite the stock market fall of most companies in the sector, the major American capitalization of solar or wind energy Their valuations remain good, especially as an environment of lower financing costs is emerging in the United States, according to estimates collected by Bloomberg.
First Solar is one of the benchmark values among American companies in the sector. The company has a buy recommendation, according to the FactSet consensus, and with an upside potential of 24% compared to its price target of $288 per share. First Solar is one of the few in the sector to gain ground by 2024 on the stock market (+57%) and However, it is trading at a low price relative to the average with a PE of 17.5 times.. According to Bloomberg analyst Rob Barret, the company’s improved expectations are based on the fact that the company’s gross operating profit (EBITDA) “could exceed $2 billion in 2024, which could be more than double that of most of its competitors,” the expert commented.
The company with the biggest lead among the six largest companies focused primarily on the green energy sector on Wall Street is Bloom Energy, which converts biogas and hydrogen into electricity without combustion. Specifically, its the potential is 57%. On the other hand, it has a hold recommendation, according to FactSet, and a lower ESG score than First Solar, according to the S&P Global Sustainability score which reflects performance in environmental, social and governance factors (the higher the score, the better the performance).
Fluence Energy and Enphase have a lead of more than 20%even though analyst firms recommend taking a position only on the first one. On the other hand, NextEra Energy, a photovoltaic and wind company with a capitalization of more than 170 billion dollars, is currently trading without potential.
