The demand for clean energy is expected to accelerate worldwide as climate change concerns and support for environmental, social, and governance (ESG) factors deepen. Furthermore, the Biden administration's objective of fully decarbonizing the U.S. economy is stimulating development in the renewable sector.
In addition, with most nations developing long-term strategies to minimize their carbon footprints, investors are getting bullish on the prospects of this industry. According to a report published by Allied Market Research, the global renewable energy market is expected to reach $1977.6 billion by 2030, registering a CAGR of 8.4%.
Given this backdrop, Wall Street analysts expect fundamentally-sound clean energy stocks ReNew Energy Global plc (RNW), Advent Technologies Holdings, Inc. (ADN), and Fusion Fuel Green PLC (HTOO) to more than double in the upcoming months.
ReNew Energy Global plc (RNW)
Headquartered in India, RNW generates power through non-conventional and renewable energy sources. It operates through Wind Power and Solar Power segments. It develops, builds, owns, and operates utility-scale wind and solar energy and distributed solar energy projects, generating energy for commercial and industrial customers.
This month, Fluence and RNW announced an agreement to form a new company to meet the needs of local consumers across India targeting India's rapidly increasing energy storage industry. According to India's Central Electricity Authority, the market for RNW and Fluence's 50:50 JV would grow from a few MWh today to 27GW/108GWh by 2030.
In December, RNW announced the completion of the 300 MW SECI-6 solar project, increasing the company's total operating capacity to 7.4 GW, the highest level ever. Despite problems associated with COVID-19 and supply chain interruptions, it saw a record installation of 1.5 GW of renewable energy projects this fiscal year. In addition, the company is on pace to fulfill its target of 8.2 GW of operating capacity by the end of the fiscal year 2022.
RNW's total income increased 44.3% year-over-year to INR 21.31 billion ($287 million) in the second quarter ended, September 30, 2021. The adjusted EBITDA grew 50.3% year-over-year to INR 18.18 billion ($245 million). Also, the RNW's portfolio witnessed an increase of 15.6% year-over-year to 10,127 MWs, out of which 6,315 MW projects were commissioned.
The stock has gained 21.6% over the past month to close its last trading session at $7.66. The 12-month median price target of $17.00 indicates a 121.9% potential upside.
Advent Technologies Holdings, Inc. (ADN)
ADN is an advanced material and technology development company functioning in the fuel cell and hydrogen technology market. The company is also involved in developing, manufacturing, and assembling the crucial components that determine hydrogen fuel cells' performance and other energy systems.
This month ADN announced its contract with the manufacturers of clean power generation and energy storage solutions to deliver electrochemistry solutions. The contract was signed in the fourth quarter of 2021, having an integrated value of $2.2 million. ADN started supplying electrochemistry components in the fourth quarter of 2021, and the deliveries are anticipated to continue through September 2022.
Last month, ADN announced that according to the plan of its long-lasting collaboration with Globe Telecom, Inc. (Globe)- it is currently upgrading the Globe's roof top sites in the Philippines with 10Kw SereneU fuel cell systems, facilitating Globe to reach its desired target for reduced CO2 emissions. Globe's motive is to reduce carbon emissions across its network, consume cleaner fuel in smaller quantities, attain lower emissions, and maintain energy-efficient heat removal by installing Advent's SereneU fuel cells.
In the third quarter ended September 30, 2021, ADN's net revenue increased 643% year-over-year to $1.70 million. Its cash and cash equivalents stood at $92.5 million over this period. In addition, analysts expect ADN's revenue to increase 153.3% year-over-year to $24.47 million in fiscal 2022.
Closing its last trading session at $3, the 12-month median price target of $11.20 indicates a 273.4% potential upside.
Fusion Fuel Green PLC (HTOO)
Ireland-based company HTOO is engaged in hydrogen production in Portugal, Southern Europe, and Morocco. HTOO envisages providing hydrogen generators to clients that operate their own green hydrogen plants, green hydrogen as an output from green hydrogen plants, and operational and monitoring services of green hydrogen plants using fusion fuel hydrogen generators. It provides natural gas networks and grids, ammonia producers, oil refineries, regulators, and related government departments.
This month, HTOO announced its plans to deliver solar-to-hydrogen technology to the British renewable energy developer Hive Energy, which will build a green hydrogen production plant in Spain. The project has an estimated production capacity of 7,500 metric tonnes and is presently in the administrative processing phase.
Last month, HTOO signed a collaboration agreement with AESA, a leading Spanish industrial engineering services company and a founder in the decarbonization of industrial energy. The agreement intends to accelerate the decarbonization of Spain's commercial and industrial base and align with the objectives built in Spain's Hydrogen Roadmap.
During the third quarter ended September 30, 2021, HTOO's pre-tax profit income came in at €1.60 million ($1.82 million). Its cash and cash equivalents stood at €42.28 million ($47.95 million).
The 12-month median price target of $27.00 indicates a 414.3% potential upside. The price targets range from a low of $25.00 to a high of $29.00. The stock closed the last trading session at $5.25.
RNW shares were trading at $7.26 per share on Wednesday morning, down $0.21 (-2.81%). Year-to-date, RNW has declined -6.68%, versus a -10.01% rise in the benchmark S&P 500 index during the same period.
About the Author: Pragya Pandey
Pragya is an equity research analyst and financial journalist with a passion for investing. In college she majored in finance and is currently pursuing the CFA program and is a Level II candidate.
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