BofA underpins Solaria with upside potential of 74%. Reaching the valuation would mean returning to the zone of January highs.
Although Solaria has become the ugly duckling of the Ibex 35 this year , with a negative balance of 31%, Bank of America (BofA) sees potential for it to become the swan it was in 2020 again. photovoltaic firm an upward journey of 74% , to 28.5 euros per share from current prices, which would mean returning to the environment of all-time highs that the company reached at the beginning of the year.
It has also reiterated its purchase advice and included Solaria in its list of best ideas for small and mid-cap stocks from European developed markets. This improvement boosted its titles by 3.6% this Tuesday and prolongs the streak of four positive sessions in which it recovered 7%.
With what arguments does the entity defend its investment thesis? On the one hand, the current price context in the energy sector, which “supports the announcements of new energy purchase agreements (PPAs), improving visibility of Solaria’s growth objectives “, argues analyst Mikel Zabala.
Solaria aims to reach 2.1 GW by 2021 and 3.1 GW by fiscal year 2022
On the other hand, “the renewable energy sector is preparing for a rebound in sentiment , helped by the multiple clean energy policy projects that will take place before the end of the year”, adds the expert.
In this sense, BofA recalls that the European Commission must continue taking steps towards its goal of reducing emissions by at least 55% by 2030, which could require an increase of 2.5 times the annual rate of solar and wind installations. Thus, this should help Solaria to achieve its short-term goals: 2.1 GW for 2021 and 3.1 GW for fiscal year 2022.
Better than Orsted and EDPR
The investment bank also welcomes Solaria’s “unique” exposure to green hydrogen projects , one of the biggest catalysts for renewables in the decade. Added to the “cost leadership” and “development ability” of the Spanish company is growth 2-3 times faster than that of the Danish Orsted and the Portuguese EDPR . According to their estimates, Solaria offers growth rates of around 20% as of 2030.
