“The sun is set to shine brighter for some solar investors, according to a new Citigroup report.
Citigroup expects a surge in demand for solar energy, MarketWatch reports, noting that the brokerage firm sees a number of seemingly positive fundamentals for the industry.
For example, over the past five years, installations grew at a compounded annualized rate of 59 percent, according to MarketWatch. Then too, there is the political drive for cleaner energy and the rising costs of fuel.
“Key point, many of the U.S. utilities we have surveyed over the past several weeks have highlighted the need to diversify into other generation sources — it is well understood that gas prices won’t stay depressed forever,” the reports states.
Yet, the positive fundamentals do not appear to be priced into the shares of solar companies.
And perhaps rightfully so in the case of some companies, according to Citigroup analyst Shahriar Pourreza, author of the report.
Playing the solar market at this point is about looking at which segment of the business has the sunniest outlook.
As Forbes points out, Pourreza initiated coverage of seven companies, but stamped buy ratings on only four of them…..”
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