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Investing.com - Baird upgraded Ormat Technologies (NYSE:ORA) stock rating from Neutral to Outperform on Wednesday, while raising its price target to $103.00 from $87.00. The renewable energy company, currently valued at $5.35 billion, has shown strong momentum with a 30.6% gain year-to-date, according to InvestingPro data.
The research firm cited growing political support for geothermal power production and development in the United States as a key factor behind the more bullish outlook for the renewable energy company.
Baird had initially rated Ormat Technologies as Neutral with a positive bias when it began coverage in the first quarter, expressing concerns about the permanence of Inflation Reduction Act incentives.
The firm noted that geothermal energy is gaining support and favorable treatment in the Build Back Better framework, contributing to its more constructive view on the stock.
Baird also highlighted potential upside to Ormat’s long-term financial targets from power purchase agreements being renegotiated at higher prices, particularly with hyperscalers. With analyst price targets ranging from $76 to $105, investors can access deeper insights and 8 additional key ProTips through InvestingPro’s comprehensive research report.
In other recent news, Ormat Technologies announced its completion of the acquisition of the Blue Mountain geothermal power plant for $88 million. The facility, located in Nevada, operates under a power purchase agreement with NV Energy, which will expire at the end of 2029. Additionally, Ormat has entered into a $62 million Hybrid Tax Equity partnership with Morgan Stanley (NYSE:MS) Renewables Inc., involving the Lower Rio energy storage facility and the Arrowleaf project. These projects are expected to be operational by the end of 2025. Jefferies raised its price target for Ormat Technologies to $97, maintaining a Buy rating, citing favorable Senate draft legislation for geothermal energy. Barclays (LON:BARC) also upgraded Ormat’s stock rating from Equalweight to Overweight, emphasizing the growing demand for geothermal energy due to power shortages in the U.S. Furthermore, Ormat has strengthened its executive team with the appointments of Aron Willis as Executive Vice President, Electricity Segment, and Daniel Moelk as Senior Vice President, Resources, Drilling, & EGS. These developments reflect Ormat’s strategic efforts to enhance its growth in the renewable energy sector.
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