The market raises the penalty for renewable energy sources, which rises to 60% | Financial markets

Listed companies linked to clean energy have seen a particular slide into stock market hell since hitting their highs in September 2022. Since then, the sector has been penalized by high financing costs, as well as a lack of investors. Appetite and decreased energy prices. But now, expectations of interest rates rising again in 2024 have breathed air into the sector, which is recovering as much as 60% on the stock market from this year’s lows, though it still suffers from severe penalties.

Greenergy records the largest recovery (60.1%), thanks…

Listed companies linked to clean energy have seen a particular slide into stock market hell since hitting their highs in September 2022. Since then, the sector has been penalized by high financing costs, as well as a lack of investors. Appetite and decreased energy prices. But now, expectations of interest rates rising again in 2024 have breathed air into the sector, which is recovering as much as 60% on the stock market from this year’s lows, though it still suffers from severe penalties.

Greenergy recorded the largest recovery (60.1%), thanks to which it was able to overcome the losses that it accumulated during the year and recorded 5.8%. The company, which jumped into the continued growth market of BME in 2019, will invest €2.6 billion until 2026 in its growth. Half of this amount will go to building the world’s largest battery in Chile to store solar energy. It is a project that, according to BNP Paribas, is not yet fully reflected in the business. “Chile is one of the few countries where there is specific regulation around storage facilities, with payments for capacity supplementing the contracted remuneration,” the French entity explains.

It follows Greenergy Solaria, which has managed to rise 41.3% from its annual stock market lows, a reassessment that has also allowed it to leave red numbers behind for the year. The solar PV generation company, which improved its earnings by 24% through September, managed to remove doubts about its profitability and is viewed favorably by analysts. 73.7% of analysts recommend buying it, according to the Bloomberg consensus, which sets the target price at 19.24 euros, giving a 10.6% probability of value despite the increase recorded since mid-October.

“Rising expectations of interest rate increases in 2024, combined with the fact that electricity prices have stabilized and inflation has subsided, make the outlook less dire than it was during the rest of the year for the sector,” says Aranzazo. The analyst adds that after the stock market reached very low levels, “the sector responded and recovered part of what fell.”

High interest rates have made renewable energy companies among the sectors most exposed to penalties in the stock market, along with real estate companies, given that they are highly leveraged companies and suffer from high financing costs. Now, with our sights set on 2024, analysts also believe that sustainable electricity prices will provide additional support to the sector.

Soltec is another stock that has benefited the most from this rebound. The company is up 29.4% from its lows for the year and is on the verge of erasing the year’s losses. For its part, Econer has added 24.6% since mid-October.

The rise recorded from the lows of the year by Acciona (19.1%) and its subsidiary Acciona Energía (21.7%) does not prevent both values ​​from being the red lanterns for this year’s caribou. They decreased by 22.4% and 24.2%, respectively. Strategists at BNP Paribas this week raised their advice on Acciona to neutral with a target price of €136 per share.

The company recently announced that it maintained its year-end outlook and is preparing to sell mature assets for 2024.

Bueno also points to another argument for the recovery of Spanish clean energy companies: “Managers are looking at what went wrong this year to take positions for 2024,” he admits.

The truth is that the hype generated by the sector among investors and large funds gradually faded as soaring valuations set off alarm bells and its star faded. Beyond that interest is in the IPOs of Acciona Energía – which has managed to add 2.4% since its debut – or in companies like Opdenergy or Solarpack, which debuted on the stock market just five years ago.

The latter has been the subject of takeover offers by investment funds. EQT has delisted Solarpack from the stock market and the Antin Fund aims to do the same with Opdenergy once the operation closes. It offers 5.85 euros in cash and has already obtained 77.27% of the capital, after the approval of the founders and management of the company and the owners of Mayoral, who control 6.09%. The operation still has to receive approval from the CNMV and the Cabinet.

Red numbers in European renewables

Ørsted. The penalty accumulated over the year by Spanish renewable energy companies is being replicated, with greater force, in the rest of Europe. Among the biggest cuts are companies such as Ørsted, which is down 45.6% since January, and Voltalia, which is down 46.3%. EDP ​​Renewables recorded the smallest declines, down 18.9%.

BME growth. Outside of the major stock market, growth companies in the BSE and the Middle East have an uneven balance, such as Umbrella Solar, which rose 3.2% during the year, while Enerside lost 19.9%.

The com-id of this app is com.eidf. The Galician company sinks 87.6% on the stock market. Its development is linked to the open crisis that the company is experiencing after the CNMV’s decision to suspend its listing for not submitting the annual accounts for 2022 on time due to discrepancies with its auditor. In the first six months of the year, the company recorded losses of 6.94 million euros.

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