From the EU and China to the US, nations have started ramping up nuclear power to feed expected generative AI demand. In the US, this is best exemplified by Microsoft Corporation's (NASDAQ:MSFT) recent deal with Constellation Energy Corp (NASDAQ:CEG) to launch Crane Clean Energy Center (CCEC) and restart Three Mile Island Unit 1, worth over 835 MW of carbon-free power.
But that doesn’t mean renewables are going out of style. According to EIA, utility-scale solar capacity went from 314 MW in 1990 to 91,309 MW by the end of 2023, representing 28,979% growth. Solar also made 49.3% of new power generating capacity last year, matching it with hydropower’s share, per FERC data.
This trend makes sense given that solar is a form of decentralized renewable that is easily installable on a home. Likewise, there is a steady trend of increased solar panel efficiency. With interest rate cuts now in play, a surge in solar panel installations should be expected once again.
First Solar, Inc.
Less focused on residential installations, the bulk of First Solar Inc's (NASDAQ:FSLR) revenue comes from utility-scale solar. Headquartered in Arizona, the company has a heavy presence globally. This includes Germany as the nation shifted away from nuclear.
Having become the most valuable solar company in May, First Solar holds one of the highest cell conversion efficiency levels at 23.1%, owing to Cadmium Telluride (CadTel) over more common crystalline silicon (c-Si). As of Q2 2024 earnings, the company holds 7.1 GW domestic operational capacity. By the second half of 2025, this should double to 14.1 GW, following the launch of Alabama and Louisiana manufacturing facilities.
In the meantime, First Solar accumulated an installation bookings backlog of 75.9 GW up to 2030. In the last quarter, the company generated $349 million net income compared to $171 million in the year-ago quarter. Total debt runs up to $3.7 billion of which $559 million is current against $1.7 billion in cash and marketable securities.
Although 2024 guidance remains unchanged at $4.4 billion to $4.6 billion net sales range, First Solar appears to have mastered the balance between expansion, R&D and demand. Against the 52-week average of $187.36, FSLR is currently priced at $255.78 per share.
Per Nasdaq forecasting data, the average FSLR price target is $290.76, giving investors a potential upside of 12.6%. However, with the doubling of capacity in the near future, FSLR upper bound target is rather substantial at $343 per share, which could net 33% gains.
Canadian Solar
Although headquartered in Ontario, Canadian Solar Inc (NASDAQ:CSIQ) has global reach with heavy investments in the US, with module production facilities in Texas alongside Indiana’s 5 GW expansion by the end of 2025.
Canadian Solar ranks among top 5 global solar capacities, having shipped 30.7 GW worth of solar power in fiscal year 2023 that generated $7.61 billion revenue. Alongside the CSI Solar division for vertically integrated manufacturing, the company holds Recurrent Energy subsidiary.
At the beginning of the year, Recurrent Energy secured a $500 million investment, via BlackRock’s Climate Infrastructure business. Recurrent Energy’s global pipeline is to develop 27 GW in solar and 63 GWh in battery storage across Europe, US, South America, Australia, South Korea and Taiwan.
On top of its ambitious expansion goals, Canadian Solar also has one of the top conversion efficiency rates at 23.81% for N-type P5 cells. In August’s Q2 earnings, the company reported exceeded solar module shipments at 8.2 GW vs expected 7.5 GW – 8 GW range. However, due to pricing pressures from Chinese manufacturers, Canadian Solar’s net income amounted to $4 million in Q2 compared to $12 million in the year-ago quarter.
Nonetheless, the company managed to decrease its total debt by $100 million to $4.2 billion, while having substantially increased operating cash flow from Q1’s $291 million to $429 million. Against the 52-week average of $18.77, CSIQ is now priced at $16.23 per share.
Per Nasdaq forecasting data, the average CSIQ price target is $17.66, with the price ceiling up to $27 per share. The latter would be in line with CSIQ’s 52-week high of $26.85 per share.
Brookfield Renewable Partners L.P.
Brookfield Renewable Partners LP (NYSE:BEP) represents a more diversified exposure to renewables. The company owns, operates and invests in hydroelectric, solar, wind and energy storage. This diversification is global across 20 countries with a portfolio exceeding 166 GW of power, with 134 GW in the development pipeline.
In Q2 2024 earnings, Brookfield reported total operating power capacity of 32,745 MW. Out of total 93,228 GWh generation, utility-scale solar made 16,502 GWh annualized. Due to acquisitions and interest expense ($489M), the company had a net loss of $88 million vs $151 million in the year-ago quarter.
However, Brookfield still maintains strong financials, evidenced by a 9% YoY increase in Funds from operations (FFO) to $339 million. The company holds $4.4 billion in available liquidity vs $29.6 billion total debt of which ~90% is rated investment grade.
Against the 52-week average of $24.48, BEP stock is currently priced at $28.34 per share. Per Nasdaq forecasting data, the average BEP price target is $30, while the bottom outlook aligns with the average at $24 per share. The high ceiling for BEP stock is $33 per share.
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Neither the author, Tim Fries, nor this website, The Tokenist, provide financial advice. Please consult our website policy prior to making financial decisions.