In this article, we discuss 10 green energy stocks to watch as Europe cuts reliance on Russia. If you want to skip our detailed analysis of these stocks, go directly to 5 Green Energy Stocks to Watch As Europe Cuts Reliance on Russia.
Europe is turning towards electricity from renewables by mid next decade in a move to meet its climate targets, and cut reliance on Russian oil and gas amid the war. Even as global stock markets plummeted since Russia’s invasion of Ukrainian territory, the renewable energy sector has been soaring, and the European Renewable Energy Index surged nearly 9.3% at the end of February.
The Russian invasion of Ukraine and Europe’s reliance on Russia for oil and natural gas shows how critical a diversification of energy supplies is for achieving energy security. The Biden administration is considering energy sanctions on Russia, in addition to economic sanctions, but that’s an extremely difficult decision given the soaring oil prices in the United States and Europe.
Shift Towards Renewable Energy
Steve Cicala from the National Bureau of Economic Research said to CNBC that the European Union “should be moving at the maximum possible speed to get themselves off of Russian gas”. By 2030 the European Union wants to slash net greenhouse gas emissions by at least 55%. In terms of renewable sources used for energy generation, there is a proposal to elevate the current target of at least 32% by 2030 to at least 40%. According to the EU, “To increase EU energy independence, we need to keep investing in renewable energy sources, but we also need to do more to decrease our dependence on fossil fuels”.
Demand for the world’s notable residential manufacturers of solar panels and home batteries is soaring, which indicates that investors are open to diving into the renewable energy sector, as it remains one of the safest options for Europe to move away from its dependency on Russian oil and gas. Some of the most significant green energy companies to watch as Europe cuts reliance on Russia are Brookfield Renewable Partners L.P. (NYSE:BEP), Sunrun Inc. (NASDAQ:RUN), and Sunnova Energy International Inc. (NYSE:NOVA).
Our Methodology
We selected companies that are set to gain and lose in the current shift towards renewable energy. For each stock, we have mentioned analyst ratings for further clarification to potential buyers. Data from 924 elite hedge funds tracked by Insider Monkey was used to assess the hedge fund sentiment around each stock.
Green Energy Stocks to Watch As Europe Cuts Reliance on Russia
10. Vestas Wind Systems A/S (OTC:VWDRY)
Number of Hedge Fund Holders: N/A
Vestas Wind Systems A/S (OTC:VWDRY) was founded in 1898 and is headquartered in Aarhus, Denmark, and the company designs and installs wind turbines worldwide. The Power Solutions segment sells wind power plants. Despite being one of the top green energy companies in the world, Vestas Wind Systems A/S (OTC:VWDRY) plunged 31.13% over the past six months.
On March 1, HSBC analyst Sean McLoughlin downgraded Vestas Wind Systems A/S (OTC:VWDRY) to Reduce from Hold with a price target of DKK 160, down from DKK 190. The analyst expressed a preference for “earnings resilience” shown in the previous rate cycles, while warning that the 2022 margin squeeze from supply disruption could be exacerbated by the Ukraine conflict.
Vestas Wind Systems A/S (OTC:VWDRY) dropped 3.3% on February 10 after the company cut its dividend payout by 78% to €0.05/share from €0.23/share and below the €0.10 forecast by analysts, while warning of continuing supply chain disruptions. The company reported a Q4 net profit of €20 million, far lower than the €115 million analyst consensus.
In addition to Brookfield Renewable Partners L.P. (NYSE:BEP), Sunrun Inc. (NASDAQ:RUN), and Sunnova Energy International Inc. (NYSE:NOVA), Vestas Wind Systems A/S (OTC:VWDRY) is a notable name in the renewables space.
9. Ørsted A/S (OTC:DNNGY)
Number of Hedge Fund Holders: N/A
Ørsted A/S (OTC:DNNGY) is based in Fredericia, Denmark, and the company develops and operates wind farms, solar farms, energy storage facilities, and bioenergy plants. The company offers its services in the United Kingdom, Germany, Denmark, the Netherlands, the United States, Taiwan, Japan, and South Korea. The stock plummeted 28.63% over the last six months.
In a press release on February 2, Ørsted A/S (OTC:DNNGY) reported a Q4 GAAP EPS of DKK7.50, and the company’s revenue came in at DKK30.66B, up 97.2% year-over-year.
HSBC analyst Adam Dickens on March 1 downgraded Ørsted A/S (OTC:DNNGY) to Hold from Buy with a price target of DKK 910, down from DKK 1,200. The analyst sees a “deteriorating mid-term outlook” after the company failed to win competitive leasehold auctions for offshore sites, saying “intense competition is now becoming the norm.”
8. Iberdrola, S.A. (OTC:IBDRY)
Number of Hedge Fund Holders: N/A
Iberdrola, S.A. (OTC:IBDRY) is a Spanish company that is involved in the generation and supply of electricity in Spain and internationally. The company markets electrical power using renewable sources like wind, hydro, solar photovoltaic, combined cycle gas, nuclear, biomass, and through the installation of batteries.
On February 28, Citi analyst Antonella Bianchessi raised the price target on Iberdrola, S.A. (OTC:IBDRY) to €12.60 from €12.10 and kept a Buy rating on the shares.
In a February 23 press release, Iberdrola, S.A. (OTC:IBDRY) reported a net profit of €3.88 billion for FY21, and a revenue of €39.11 billion, up 18.0% year-over-year.
Iberdrola, S.A. (OTC:IBDRY) is a fully integrated utility with a high market cap and plenty of green assets. Similar to Enel Chile S.A. (NYSE:ENIC), it also has ambitious investment plans, which warrants a buy upside. The company deals in multiple renewable sources of energy, and is positioned to gain as Europe cuts reliance on Russia for oil and gas, moving towards alternatives.
7. JinkoSolar Holding Co., Ltd. (NYSE:JKS)
Number of Hedge Fund Holders: 10
JinkoSolar Holding Co., Ltd. (NYSE:JKS) is based in Shangrao, China, and the company designs and develops photovoltaic products. It also provides solar system integration services and carries out commercial solar power projects.
On January 31, Goldman Sachs analyst Brian Lee lowered the price target on JinkoSolar Holding Co., Ltd. (NYSE:JKS) to $26 from $29 and kept a Sell rating on the shares as part of a broader research note previewing Q4 results in the solar energy space. The analyst cites logistics, input cost, and policy headwinds, also noting that JinkoSolar Holding Co., Ltd. (NYSE:JKS) is dealing with cash flow and debt as “structural issues”.
On November 30, JinkoSolar Holding Co., Ltd. (NYSE:JKS) dropped 6% pre-market after Q3 GAAP earnings missed estimates and its Q4 revenue forecast also fell short of expectations. JinkoSolar Holding Co., Ltd. (NYSE:JKS) expects Q4 revenues of $1.8 billion-$2.2 billion, below $2.29 billion analyst consensus, with gross margin expected in the 13%-16% range and total shipments of 7.3-8.8 GW. It is one of the stocks that analysts have not upgraded despite the shift towards renewable energy.
According to the fourth quarter database of Insider Monkey, 10 hedge funds were bullish on JinkoSolar Holding Co., Ltd. (NYSE:JKS), with total stakes amounting to $40.4 million. Millennium Management is the biggest shareholder of the company, with 242,153 shares worth $11.1 million.
6. TransAlta Corporation (NYSE:TAC)
Number of Hedge Fund Holders: 14
Headquartered in Calgary, Canada, TransAlta Corporation (NYSE:TAC) is a company that owns and operates hydro, wind and solar, natural gas-fired, and coal-fired facilities for electricity generation. TransAlta Corporation (NYSE:TAC) serves municipalities, medium and large industries, businesses, and utility customers.
On December 14, TransAlta Corporation (NYSE:TAC) declared a C$0.05 per share quarterly dividend, in line with previous. The dividend is payable on April 1, to shareholders of record on March 1.
TransAlta Corporation (NYSE:TAC) announced on February 1 that it has made a $2 million equity investment in Ekona Power’s Series A funding round. The investment will help support the commercialization of Ekona’s novel technology that produces cleaner and lower-cost turquoise hydrogen. TransAlta Corporation (NYSE:TAC) believes hydrogen, as a fuel source, is a promising pathway to decarbonize the electricity sector and provide dispatchable, net-zero generation.
TD Securities analyst John Mould lowered the price target on TransAlta Corporation (NYSE:TAC) to C$17 from C$17.50 and kept a Buy rating on the shares on January 6.
Among the hedge funds tracked by Insider Monkey, 14 funds were bullish on TransAlta Corporation (NYSE:TAC) in Q4, up from 12 funds in the preceding quarter. David Rosen’s Rubric Capital Management held the biggest stake in the company, with more than 5 million shares worth $57.70 million.
Hedge funds are pouring into TransAlta Corporation (NYSE:TAC) amid the shift to renewable energy, and they also remain bullish on Brookfield Renewable Partners L.P. (NYSE:BEP), Sunrun Inc. (NASDAQ:RUN), and Sunnova Energy International Inc. (NYSE:NOVA).
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Disclosure: None. 10 Green Energy Stocks to Watch As Europe Cuts Reliance on Russia is originally published on Insider Monkey.
