Raymond James (RJF) isn’t overly worried about the tax credit problems that solar energy companies like Sunnova Energy International (NOVA) may be facing. In a note to investors, analyst Pavel Molchanov discussed the notion that solar energy producers may lose federal tax credits when Donald Trump returns to the White House. He stated that both Raymond James and Sunnova regard these fears as “overblown” after a call with two of the company’s leaders.
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What’s Happening with Sunnova Stock?
Despite the negative sentiment that is facing many solar energy stocks, Sunnova stock spent today rising steadily. Shares closed out the day up 11%. Like most of its peers, NOVA stock fell last week after Trump’s election victory. While today’s performance has been promising, it is still not enough to push it back into the green for the week. However, if Molchanov’s take is correct, this positive momentum may continue.
It makes sense that investors should be nervous about U.S.-based solar energy stocks. Trump is likely to prioritize oil drilling at the expense of clean energy development, which would be a clear blow to solar producers. However, as per Molchanov’s note, “the kneejerk selloff in clean tech stocks across the board is reflective of fears about the durability of federal tax credits,” which both his team and Sunnova see as overblown.
While Molchanov has not issued a price target for NOVA stock, Raymond James reiterated a Strong Buy rating yesterday. The analyst is also bullish on fellow clean energy producer Enphase Energy (ENPH), on which he maintains a price target of $130, implying 94% upside potential.
Wall Street Is Fairly Bullish on Sunnova Stock
Overall, Wall Street is still fairly bullish on Sunnova, even as tax credit fears continue to loom. Analysts have a Moderate Buy consensus rating on NOVA stock based on nine Buys, six Holds, and one Sell assigned in the past three months, as indicated by the graphic below. Although shares have fallen 59% over the past year, the average NOVA price target of $10.77 per share implies 209% upside potential.
