Jefferies starts First Solar, Enphase stocks at buy ratings

Jefferies analysts announced Thursday evening the start of their coverage of alternative energy stocks, giving First Solar Inc.
FSLR,
+7.98%,
Enphase Energy Inc.
ENPH,
+11.72%,
and SunRun Inc.
RUN,
+19.92%

stocks buy notes. In times of “uncertainty, we see better risk/reward for companies with exposure to utilities, with strong backlogs and balance sheets,” the analysts said. They rated SunPower Corp. shares.
SPWR,
+15.33%

and Array Technologies Inc.
ARRY,
+4.28%

as a wedge. Catalysts for the sector heading into next year include greater clarity on the law’s provisions on reducing inflation and “stabilizing” interest rates, analysts said. Alternative energy stocks and particularly solar energy have significantly underperformed this year, thanks to macroeconomic factors such as higher interest rates and regulatory changes in states like California that have increased deadlines reimbursement for solar energy. Among stocks rated Buy, First Solar is a top pick, “as it meets our key criteria, including a strong backlog… favorable pricing in a falling price environment, strong balance sheet” and gross margins reaching around 25% in 2025 from 18.% this year, analysts say.