Clean energy stocks have been hammered and since the beginning of the year, two indexes that measure the sector—WinderHill Clean Energy and S&P Global Clean Energy—have declined 13.9% and 8.2%, respectively. The WinderHill index has dropped 54% from its high at the beginning of 2021, while the S&P index has down 39%. (For reference, the Nasdaq Composite Index is down 9.6% from its November peak.)
Fears about relatively high U.S. interest rates, a possible decline in solar-system subsidies for California householders, a relatively broad stock market roster out of high-growth tech firms, and the blockage of President Joe Biden’s stalled “Build Back Better” action plan by 50 Republicans and two Democrats, Joe Manchin and Kyrsten Sinema, have all weighed heavily on the industry. The troubles appear to be outweighing any potential benefits from Biden’s enormous infrastructure package, which was signed into law in 2021.
Nonetheless, as evidence of a probable extended bad market in this sector grows, analysts at Morgan Stanley, BNP Paribas Exane, and BMO Capital Markets see opportunities to buy, Bloomberg reported.
Morgan Stanley experts upgraded the clean energy business in North America to “attractive” from “in-line,” stating that they expect significant growth and values that generally look good regardless of whether the United States Congress adopts the “Build Back Better” bill.
According to Morgan Stanley’s analysis released this week said they believe now is an ideal moment to carefully acquire clean energy stocks after considerable underperformance in 2021.
“We see continued strong growth for wind, solar, energy storage, fuel cells, and electrification technologies.”