3 Clean Energy Stocks That Could Thrive Under Trump
Alex Kimani

Clean energy investors have endured yet another torrid year as traders continue shunning the alternative energy sector. The solar sector, in particular, highlights the negative sentiment pervading renewable energy investing: According to a recent report by the Solar Energy Industries Association (SEIA), the U.S. is on track to add close to 40 gigawatts of solar energy capacity in 2024--more than double last year’s tally and more than triple what was added in 2022. The solar sector is clearly booming, yet solar stocks have badly underperformed,  with the sector’s popular benchmark, Invesco Solar ETF (NYSEARCA:TAN), having returned -35.3% YTD vs. 24.3% by the S&P 500.

The upcoming Trump presidency is considered bearish for renewable energy investing. For years, Trump has never hidden his disdain for clean energy, repeatedly lambasting Biden’s historic  Inflation Reduction Act (IRA), describing it as the “biggest tax hike in history”. Trump has pledged to rescind any “unspent” funds under the IRA after he ascends to the Oval Office.

However, there are some pockets within the renewable energy universe that are looking quite promising. Here are 3 renewable energy stocks that outperformed in the current year and could do it again in 2025.

Eco Wave Power (NASDAQ:WAVE)

Market Cap: $77.7M

YTD Returns: 951%

Eco Wave Power (NASDAQ:WAVE) is a wave energy company that develops wave energy conversion (WEC) technology that converts ocean and sea waves into clean electricity. WAVE shares have been surging after the company received the final nationwide permit from the U.S. Army Corps of Engineers for its wave energy project at the Port of Los Angeles in California. The company will install eight wave energy floaters on the piles of an existing concrete wharf structure on the east side of the port's Municipal Pier One. According to Eco Wave, securing the final permit marks the completion of two key milestones in its agreement with Shell Plc. (NYSE:SHEL) which is expected to boost the company's revenues in Q4 2024.

Europe is the global leader in blue energy, with nearly half of global investments in ocean energy over the last decade flowing into the continent. That’s great news for Eco Wave Power because the company is well-established in the region. Indeed, the company’s first operational wave energy plant was developed in Gibraltar with EU funding. Eco Wave Power is currently developing a 20 MW wave energy project in Porto, Portugal as part of the country’s plan to generate 85% of its electricity from renewable sources by 2030. Eco Wave Power established a subsidiary in Portugal in 2020 and kicked off the licensing process. In March 2024, the company received approval to start construction and committed to completing the project within two years.

GE Vernova

Market Cap: $94.6B

YTD Returns: 135%

One of the newer companies in the space, GE Vernova (NYSE:GEV) was incorporated in 2023 after being spun off from General Electric (NYSE:GE). This Cambridge, Massachusetts-based company deals in energy equipment manufacturing and services. GE Vernova operates under Power, Wind, and Electrification segments. The company is well-positioned to profit from sustained growth trends as a supplier of power generation assets.

Two weeks ago, GE Vernova reaffirmed guidance for FY 2024 revenues and free cash flow, and also raised guidance for 2025 revenues, free cash flow and adjusted EBITDA margin. The company now sees FY 2024 revenues trending towards the higher end of guidance of $34B-$35B; adjusted EBITDA margin of 5.5%-6.0%, narrowed from its previous outlook for 5%-7%; and free cash flow trending towards higher end of $1.3B-$1.7B guidance.

For FY 2025, GE Vernova has forecasts revenue in the range of $36B-$$37B, up from prior guidance of mid-single digit growth implying revenues of $35B-$37B; adjusted EBITDA margin of high-single digits and free cash flow of $2B-$2.5B, up from $1.2B-$1.8B previously.

"We are executing our financial strategy, and we now expect to generate at least $14B in cumulative free cash flow by 2028," GE Vernova CFO Ken Parks said.

Tesla Inc. (NASDAQ:TSLA)

Market Cap: $1.5T

YTD Returns: 73.8%

Tesla Inc. (NASDAQ:TSLA) is one of the largest manufacturers of electric vehicles on the planet. TSLA stock is trading close to an all-time high with the strong bullish vibe being driven by the view that the Elon Musk-led company will benefit from a Trump Administration that will be friendly to the process of securing autonomous vehicle approvals as it looks to grow the robotaxi fleet rapidly over the next two years.

However, Wall Street is more cautious about the shares, assigning TSLA a Hold rating and an average price target of only $259.66, considerably lower than the current price of $421.44. Some bears have pointed out that a similar monster rally in 2021 was followed by a drop of more than 70% over the next 18 months.

By Alex Kimani for Oilprice.com

 

 

 

Alex Kimani is a veteran finance writer, investor, engineer and researcher for Safehaven.com. 

 

 

oilpice.com