Justin Sullivan/Getty Images News
Bloom Energy (NYSE:BE) +9.2% and Stem (NYSE:STEM) +14.5% after Morgan Stanley upgraded both names Tuesday to Overweight from Equal Weight with respective $35 and $15 price targets, as the Inflation Reduction Act and the expected easing of supply chains in battery storage provide a path to profitability in 2023.
Current “highly discounted valuations” do not reflect strong multi-year growth and margin improvement for clean tech that likely will result from the IRA in 2023, Morgan Stanley’s Stephen Byrd wrote.
For Bloom Energy (BE), the analyst anticipates a strong setup into 2023 as the company gains operating leverage from its Fremont manufacturing facility and rising utility bills and grid instability, driving continued demand for its fuel cell applications.
Stem (STEM) is seen as an attractive energy storage play in 2023, due to global battery supply, IRA support through a standalone storage ITC, and the company’s focus on driving higher margin software sales.
Morgan Stanley also upgraded Altus Power (NYSE:AMPS) to Overweight with a $12 PT, as a market leader in C&I distributed solar development, which is poised for significant growth.
Stem’s (STEM) growth and margin profile could grow to resemble Enphase Energy, Leo Imasuen wrote in an analysis published on Seeking Alpha.
Source: news.google.com
