Institutional investors and professional traders rely on The Fly to keep up-to-the-second on breaking news in the electric vehicle and clean energy space, as well as which stocks in these sectors that the best analysts on Wall Street are saying to buy and sell.
From the hotly-debated high-flier Tesla, Wall Street's newest darling Rivian, traditional-stalwarts turned EV-upstarts GM and Ford to the numerous SPAC-deal makers that have come public in this red-hot space, The Fly has you covered with "Charged," a weekly recap of the top stories and expert calls in the sector.
FSD BETA: Tesla (TSLA) CEO Elon Musk said on Twitter that Beta 10.9 for its full self-driving feature "should be ready in about a week." Musk added that Beta 11 with single city/highway software stack and other architectural upgrades will arrive "probably next month." He also said that the pricing for its full self-driving feature is rising to $12,000 on January 17.
Meanwhile, CEO Phil Eyler commented that Gentherm (THRM) "had a breakthrough win with one of the largest EV manufacturers with CCS and heat" and would talk more on the earnings call about it. While nothing has been confirmed by the company, Craig-Hallum analyst Ryan Sigdahl has several reasons to believe the award alluded to by Eyler was for CCS on Tesla's highest-production models, the 3 and Y. Further, the analyst thinks the word "breakthrough" at CCS is key, and the language is consistent with past conference calls for who he believes to be Tesla. Gentherm has been selling steering wheel and seat heaters to Tesla, but higher-ASP CCS would be a significant increase in business, he contended. Sigdahl believes the stock opportunity has never been clearer than right now for Gentherm, and keeps a Buy rating on the shares, with a price target of $100.
NIKOLA DROPS SUIT AGAINST TESLA: Nikola (NKLA) decided to drop its $2B patent infringement lawsuit against Tesla on Tuesday, Robert Burnson of Bloomberg reported, citing a joint filing in San Francisco federal court. This comes as Nikola's founder Trevor Milton is wrapped up in a legal battle for criminal charges claiming that he misled investors. Both rivals have reportedly agreed to withdraw all previous claims and counter-claims against each other.
SOLID REVENUE GROWTH: KeyBanc analyst Leo Mariani initiated coverage of Plug Power (PLUG) with an Overweight rating and $40 price target. The analyst expects solid revenue growth over the next few years and believes the company has a "strong" financial position and the right corporate partners. Public U.S. fuel cell companies are poised to benefit from a "rapidly growing market for their services as fuel cell adoption is poised to accelerate this decade," Mariani told investors in a research note. The analyst sees "sizable growth" in the market this decade with a total addressable market approaching $300B by 2030. He thinks fuel cell companies can grow revenues 20%-80% in 2022 and potentially at higher rates in the out years as global adoption for these products accelerates.
The analyst also upgraded Bloom Energy (BE) to Overweight from Sector Weight with a $30 price target after assuming coverage of the name.
MOVING TO THE SIDELINES: Raymond James analyst Pavel Molchanov downgraded NextEra Energy Partners (NEP) to Market Perform from Outperform without a price target. Following the stock's 2021 outperformance, pushing the dividend yield to the lowest level among peers, it seems like a stretch to expect even more multiple expansion, Molchanov told investors in a research note.
Molchanov also upgraded SunPower (SPWR) to Outperform from Market Perform with a $26 price target. Molchanov thinks the stock's reaction to recent headlines -- the apparent demise of the Build Back Better bill in Congress, which reduced the likelihood that the Investment Tax Credit would get an extension through 2030, and the California Public Utilities Commission's initial proposal for net metering reform being perceived by residential PV providers as harsh -- was overdone, the analyst told investors in a research note.
Additionally, the analyst upgraded First Solar (FSLR) to Market Perform from Underperform without a price target. Following a rash of negative headlines and the resulting pressure on the stock, the risk/reward has become more balanced, Molchanov tells investors in a research note. Amid a multitude of tariff barriers in place, any steps in the opposite direction have the effect of intensifying competition, leading to margin erosion for First Solar, the analyst added.
ENTRY POINT: Scotiabank analyst Robert Hope upgraded Brookfield Renewable Partners (BEP) to Outperform from Sector Perform with an unchanged price target of $42. He has long liked Brookfield Renewable's "high-quality and diversified renewable assets," calling the shares an "attractive way to play the de-carbonization theme." December weakness in the stock was likely due in part to tax loss selling and given that shares of the Canadian renewable power group were under pressure in 2021 he believes the units are now attractively valued and he sees an entry point for those, like him, who have "long liked the business but were previously held back by valuation," Hope said.
SLOWER TRANSITION: Bank of America analyst Julien Dumoulin-Smith downgraded Enphase Energy (ENPH) to Neutral from Buy with a price target of $187, down from $297, after the company's recent analyst day. The event highlighted the company's efforts to diversify beyond its core microinverter sales, but affirmed his concerns about a slower transition than perceived, Dumoulin-Smith said. After having "thoroughly scrubbed" his assumptions, he lowered his estimates closer to the Street in the near-term, "materially cutting" his EBITDA estimates in the process ahead of the "transition year" being faced by Enphase in 2022, the analyst added.
SOLAREDGE UPGRADES: UBS analyst Jon Windham upgraded SolarEdge Technologies (SEDG) to Neutral from Sell with a price target of $280, up from $250. The analyst argued that while SolarEdge remains "relatively more insulated" from California policy changes than peers, his prior negative view reflected the risk that the long-awaited NEM 3.0 decision would weigh on valuations across the residential solar exposed names. With the release of the Proposed Decision over NEM 3.0, Windham sees the stock's risk as more balanced.
Meawhile, Goldman Sachs analyst Brian Lee added SolarEdge to the firm's Americas Conviction List and reiterated a Buy rating on the shares with a price target of $448, up from $420. The analyst believes near-term total addressable market expansion, particularly into residential storage and utility-scale solar, will drive new acceleration in the company's growth. In addition, he views the recent compression in stock's multiple as unwarranted, particularly given SolarEdge's "strong execution against ongoing supply chain and logistics challenges and robust demand across solar and energy storage end markets."