With 17 days to Election Day, analysts are eyeing renewable energy companies as potential market movers post-election.
JPMorgan’s Mark Strouse has his sights set on First Solar Inc FSLR, NextEra Energy Inc NEE, and Enphase Energy Inc ENPH.
Depending on the outcome on Nov. 5, these companies could either ride a relief rally or face some uncertainty. Either way, there’s action on the horizon.
Read Also: What’s Going On With First Solar Stock?
‘Knee-Jerk Relief Rally’ For The Election Darlings?
Two potential election outcomes may drive an initial boost for renewable stocks, Strouse says.
A “Democrat sweep or Trump/Harris win with a split Congress” could lead to a “knee-jerk relief rally” for renewables, particularly for companies like First Solar, NextEra and Enphase. Investors could breathe a sigh of relief, with the view that the Inflation Reduction Act (IRA) will remain intact, ensuring strong tailwinds for these renewable giants.
For First Solar, in particular, a Donald Trump victory could be a blue-sky scenario. Strouse believes that “Mr. Trump could also implement incremental tariffs on imports, providing upside to FSLR pricing vs. international competitors.” Translation: if tariffs hit, First Solar stands to gain.
Trump Victory With A Split Congress: First Solar's Dream Scenario?
A Trump win with a split Congress could be just what First Solar needs. The IRA would remain untouched and additional tariffs could give First Solar a pricing advantage over international competitors. For investors, this could mean a big upside for the stock in 2024.
With First Solar already flexing its muscles in the U.S. market, the possibility of incremental tariffs under a Trump administration could only add to its bullish trajectory. It's a stock to watch closely in the event of this political shake-up.
Renewables Stocks Like Sunrun, Sunnova Could Still Shine
Sunrun Inc RUN and Sunnova Energy International Inc NOVA are also poised to benefit from election outcomes.
A split Congress could keep the IRA intact, benefiting both companies. Strouse also sees potential upside if Foreign Entity of Concern (FEOC) limits widen, as this would be another positive factor for U.S.-based renewable companies, especially those with a domestic content advantage.
However, a Republican sweep could shift the narrative, potentially delaying investor enthusiasm for stocks like Sunrun and Sunnova.
Strouse acknowledges that investors may “await further policy clarity” before buying any post-election dips in these companies.
A Republican Sweep: Uncertainty Lingers For Offshore Wind & EV Charging Stocks
While Strouse remains largely optimistic about the core solar stocks, he warns that a Republican sweep could create more uncertainty for less mature markets like offshore wind and EV charging infrastructure.
Stocks tied to these sectors could face headwinds as policy clarity may take longer to develop. But for the big players—First Solar, NextEra, and Enphase—the fundamentals look strong regardless of political outcomes.
Election Results Could Shake Up Renewable Stocks
As we approach election season, the future for renewable stocks like First Solar, NextEra, and Enphase looks bright, but also volatile. Strouse's analysis provides a clear roadmap for investors: keep an eye on the post-election reaction, especially if First Solar gets the perfect political storm in its favor.
The market's reaction may be swift, so buckle up and stay alert—these renewable energy leaders could see big moves after the election.
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