Solar energy can give investors exposure to high growth opportunities to set up their portfolios for future gains. One solar company in particular, First Solar, is getting bullish vibes from a pair of Wall Street analysts.
Bank of America analyst Julien Dumoulin-Smith confirmed a buy rating, noting that the stock is “well positioned to benefit from the industry’s favorable supply and demand dynamics.” Dumoulin-Smith expects the solar company to perform well in 2023, rising 13% to a price of $165.
Mirroring that enthusiasm for First Solar is Guggenheim Partners analyst Joseph Osha. Osha noted that strong bookings growth could propel First Solar to a stock price of $233, which would be a 60% jump.
Solar-Powered ETF Exposure
First Solar is the third largest holding in the Global X Solar ETF (RAYS), comprising about 7% of the fund as of October 28. The fund comes with an expense ratio of 0.50%.
With opportunities abounding for growth in the solar energy market, RAYS is poised to offer investors a pure growth play in addition to the short-term upside the fund provides. Government subsidies (i.e. the Inflation Reduction Act) supporting the increased use of solar power could energize RAYS, making it an ideal growth option.
RAYS seeks to invest in companies positioned to benefit from the advancement of the global solar technology industry, which includes companies involved in solar power production, the integration of solar into energy systems, and the development/manufacturing of solar-powered generators, engines, batteries, and other technologies related to the utilization of the sun as an energy source.
The prices of solar power materials have gone down as of late despite the rising tide of inflation. That said, more solar projects could be underway in the coming years due to the passage of the act, which can allocate more funds towards renewable energy sources like solar.
RAYS offers investors:
- High growth potential: Forecasts suggest that the global market for solar energy could reach $200 billion by 2026, quadruple the market size in 2019.
- Advancing clean technologies: Solar is the most abundant energy resource on earth. Increased adoption of solar technologies could potentially help address global power insecurity and minimize the adverse environmental impacts of fossil fuel consumption.
- Conscious approach: RAYS incorporates environmental, social, and governance (ESG) screens and follows ESG proxy voting guidelines to affect positive change alongside financial returns.
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