Why Bank Of America Is Turning Bullish On This ESG Stock

Atlantica Sustainable Infrastructure PLC AY is a “defensive play” in a highly volatile market, according to BofA Securities.

The Atlantica Sustainable Infrastructure Analyst: Julien Dumoulin-Smith upgraded Atlantica Sustainable Infrastructure from Neutral to Buy while reducing the price target from $38 to $33.

The Atlantica Sustainable Infrastructure Takeaways: A YieldCo structure, with long-term fixed-price power purchase agreements in place, makes the stock “relatively lower risk” versus its renewable and cleantech peers, Dumoulin-Smith said in a Thursday upgrade note.

“Despite rising rate risk (to which yieldcos are admittedly levered most among renewable cos), we continue to see DCF value as a theoretical valuation ‘floor’ for shares,” the analyst said. 

“Moreover, despite the near-term risks (particularly to US markets) from China COVID lockdowns & Antidumping and Countervailing Duties (ADCVD) investigation and the possibility of near-term slowdown in growth, we still see upside from long-term renewable development, bolstered by post-Ukraine government support for clean energy targets & energy independence,” he added.

AY Price Action: Shares of Atlantica Sustainable Infrastructure were trading 1.11% higher at $29.21 late Thursday morning, according to Benzinga Pro.