Key points:
- The Alternative Energy sector has been impacted by a rotation out of growth equities
- Price targets for Plug Power, Bloom Energy, and Ballard Power were all cut at Truist
- Perhaps further green investment in 2022 might reviltalise bullish sentiment
Alternative energy stocks haven’t received quite the market praise you might expect from the growing global fight towards climate change. This isn’t to say that clean energy isn’t a promising sector, yet recent investment shifts over the course of the year and the last few months especially have left the sector looking somewhat neglected. Analysts appear more cautious in their short-term consensus – with a particular focus on the knock-on effect of a wider rotation out of growth equities.
Alternative energy stocks, for the most part, underperformed in 2021. With barriers to the Biden administration’s ‘Build Back Better’ scheme restricting sector investment and numerous other headwinds impacting stock performance; Today, Truist analyst Tristan Richardson cut price targets on three of the largest alternative energy companies – Plug Power (NASDAQ: PLUG), Bloom Energy (NYSE: BE), and Ballard Power (NASDAQ: BLDP).
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The three target cuts surmise a wider research note on Alternative Energy. Richardson focuses on the board rotation out of growth equities that has ‘disproportionately impacted sector performance’. Plug Power stock has been cut to $27 from $44, Ballard Power has been cut to $13 from $18, and Richardson also cut Bloom Energy to $20 from $33 – whilst maintaining a hold rating on all three companies.
We are likely to see some alleviation in supply chain issues in forthcoming Q4 earnings, however Truist analyst also refers to ‘seemingly muted’ residential demand weighing on sector growth. 2022 will likely breed further investment into the clean energy sector, and hence today’s price cuts more appropriately reflect a short-term bullish hiatus rather than a projection of long-term growth.
Companies like Plug and Bloom still boast firm fundamentals, and despite the current landscape proving problematic for growth sectors; there is definitely room for wider market appreciation in the coming months.
