In this article, we discuss 10 renewable energy stocks that can benefit as Europe braces for harsh winter. If you want to see more stocks in this selection, check out These 5 Renewable Energy Stocks Can Benefit as Europe Braces for Harsh Winter.
The EU is taking emergency measures to control the electricity prices by replacing natural gas with renewable sources. Energy giant Shell plc (NYSE:SHEL) has warned that the energy crisis could be prevalent for several years, and energy firms are already beginning to turn to the government for financial support. According to a Financial Times report dated August 29, European Commission president Ursula von der Leyen said that member EU states were coming together to deal with the crisis, and the “emergency intervention” would lead to structural changes in the energy market, allowing cheap renewable energy sources to curb soaring electricity rates. She added:
“We’ll have to ensure renewable energies are generated at lower costs, that those costs are transferred to consumers and windfall profits used to help vulnerable households.”
The energy crisis will likely lead to a European recession, and Shell plc (NYSE:SHEL)’s CEO Ben van Beurden said that energy needs to be rationed in Europe for many years. As per Financial Times, Beurden warned:
“It may well be that we have a number of winters where we have to somehow find solutions through efficiency savings, through rationing and a very, very quick buildout of alternatives.”
After the Russian invasion of Ukraine, benchmark electricity prices in Europe have climbed to almost 10 times the decade-long average, and there has been a 14-fold surge in the cost of gas. There are also fears of energy shortages in the coming winter. European authorities are trying to transition towards renewable sources of energy as soon as possible, to curb costs and energy shortage. This will act as a positive catalyst for renewable energy firms working in Europe, and some of the most notable gainers as the region braces for a harsh winter include SolarEdge Technologies, Inc. (NASDAQ:SEDG), First Solar, Inc. (NASDAQ:FSLR), and Sunnova Energy International Inc. (NYSE:NOVA).
Our Methodology
We chose European renewable energy firms, as well as international firms with operations in Europe, for this list. These firms stand to gain as Europe moves aggressively towards renewables. We have ranked the list according to the hedge fund sentiment around the securities, which was assessed from Insider Monkey’s Q2 2022 database of about 900 elite hedge funds.
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These Renewable Energy Stocks Can Benefit as Europe Braces for Harsh Winter
10. Eni S.p.A. (NYSE:E)
Number of Hedge Fund Holders: 8
Eni S.p.A. (NYSE:E) was founded in 1953 and is headquartered in Rome, Italy. The company produces crude oil and natural gas. Eni S.p.A. (NYSE:E)’s Power & Renewables segment engages in the production and wholesale of electricity generated by thermoelectric and renewable plants. The company’s EPS is projected to grow 154.3% this year, which is significantly higher than the average industry EPS growth of 116.1%. For Q2 2022, Eni S.p.A. (NYSE:E) posted a non-GAAP EPS of €1.07 and a revenue of €31.8 billion, up 91% year over year. The company reiterated its guidance of more than 2 GW of installed renewable generation capacity by the end of 2022.
Eni S.p.A. (NYSE:E)’s Q2 2022 profit margins climbed 15-fold compared to the prior-year quarter, surging to €3.82 billion from €247 million in Q2 2021. Eni S.p.A. (NYSE:E) also lifted its 2022 share buyback program by €1.3 billion. It now equals €2.4 billion, reflecting the impact of a stronger U.S. dollar and resilience of the firm’s cash flows.
On August 17, Morgan Stanley analyst Martijn Rats maintained an Equal Weight rating on Eni S.p.A. (NYSE:E) and lowered the price target on the shares to EUR 14.10 from EUR 15.40. On August 5, Berenberg analyst Henry Tarr reiterated a Buy recommendation on Eni S.p.A. (NYSE:E) but cut the price target to EUR 16.50 from EUR 17.50.
According to Insider Monkey’s data, Eni S.p.A. (NYSE:E) was part of 8 hedge fund portfolios at the end of Q2 2022, with collective stakes worth $137.65 million. Arrowstreet Capital is the biggest shareholder of the company, with 2.4 million shares worth $57.8 million.
Like SolarEdge Technologies, Inc. (NASDAQ:SEDG), First Solar, Inc. (NASDAQ:FSLR), and Sunnova Energy International Inc. (NYSE:NOVA), Eni S.p.A. (NYSE:E) is one of the renewable energy firms that can benefit as Europe braces for a harsh winter.
9. Equinor ASA (NYSE:EQNR)
Number of Hedge Fund Holders: 9
Equinor ASA (NYSE:EQNR) is headquartered in Stavanger, Norway, and the company specializes in the exploration, production, and refining of petroleum and petroleum-derived products, as well as alternative forms of energy in Norway and internationally. Equinor ASA (NYSE:EQNR)’s Renewables segment develops wind, storage, and carbon capture projects.
On August 30, Equinor ASA (NYSE:EQNR) and Wintershall Dea announced that they will collaborate and develop carbon capture and storage projects, including a 900-km pipeline from northern Germany to storage sites offshore Norway before 2032. This pipeline would have a storage capacity of 20 million to 40 million metric tons per year of CO2, equivalent to about 20% of all annual German industrial emissions. The joint venture aims to develop multiple cross-border carbon capture and storage value chains in Europe once governments authorize regulatory frameworks. Equinor ASA (NYSE:EQNR) is one of the renewable energy stocks that can benefit as Europe braces for a harsh winter and moves away from traditional energy sources.
Equinor ASA (NYSE:EQNR) on July 27 declared a $0.20 per share quarterly dividend, in line with previous. The dividend is distributable on November 29, to shareholders of record on November 14. The board announced an extraordinary per share cash dividend of $0.50 as well.
According to Insider Monkey’s data, 9 hedge funds were long Equinor ASA (NYSE:EQNR) at the end of the second quarter of 2022, with combined stakes worth $454 million, compared to 16 funds the prior quarter worth $575.2 million. Jim Simons’ Renaissance Technologies held a notable stake in the company, with 1.20 million shares worth $41.8 million.
Here is what Massif Capital has to say about Equinor ASA (NYSE:E) in its Q2 2021 investor letter:
“We currently have two oil-related positions in our portfolio and believe the oil opportunity set is ripe. As one might expect, both positions, (including Equinor: EQNR) performed well during the second quarter, given the steady march higher that oil has made in recent months. We maintain a positive outlook for both companies, although, importantly, our posture is not predicated on an expectation for continued oil price appreciation. This is not because of our inability to imagine scenarios where that does occur, but more out of an abundance of caution for what is a highly volatile commodity that at current price levels should be more than sufficient to generate ample free cash flow for any investable oil firm.
In the future, we expect both firms in the portfolio to generate significant free cash flow and expect EQNR to reinvest that free cash flow into a combination of offshore oil and wind opportunities with high rates of return. The path forward for AOI is more complicated and does warrant a few comments.”
8. Brookfield Renewable Partners L.P. (NYSE:BEP)
Number of Hedge Fund Holders: 19
Brookfield Renewable Partners L.P. (NYSE:BEP) was founded in 1999 and is headquartered in Hamilton, Bermuda. The company owns multiple renewable power generating facilities in North America, Colombia, Brazil, Europe, India, and China. The company uses hydroelectric, wind, solar, pumped storage, cogeneration, and biomass sources for electricity generation.
On August 8, Brookfield Renewable Partners L.P. (NYSE:BEP) announced a $0.32 per share quarterly dividend. The dividend is payable on September 29, to shareholders of the company as of August 31. The company’s Q2 revenue of $1.27 billion gained 24.5% on a year over year basis, outperforming estimates by $130 million.
JPMorgan analyst Mark Strouse raised the price target on Brookfield Renewable Partners L.P. (NYSE:BEP) to $43 from $41 and kept an Overweight rating on the shares on August 8. The analyst thinks the Inflation Reduction Act is a primary policy change in U.S. history, which will quicken growth in an “already inevitable energy transition to renewables”.
According to Insider Monkey’s Q2 data, 19 hedge funds were bullish on Brookfield Renewable Partners L.P. (NYSE:BEP), compared to 18 funds in the last quarter. Robert Joseph Caruso’s Select Equity Group is the biggest stakeholder of the company, with roughly 2.6 million shares worth about $90 million.
Here is what ClearBridge Investments Global Infrastructure Income Strategy has to say about Brookfield Renewable Partners L.P. (NYSE:BEP) in its Q1 2022 investor letter:
“Brookfield Renewable is a pure-play renewables operator and developer headquartered in Canada, focused on international hydro, solar, wind and storage technology. As more private and public institutions announce ambitious carbon reduction initiatives, Brookfield Renewable’s globally diversified, multi- technology renewables business makes it an attractive partner. Brookfield’s development pipeline stands at 18,000 MWs, providing confidence the company can meet its targeted double- digit cash flow growth through to 2025. The market narrative around the energy transition and energy security, along with increasing fossil fuels prices which have driven greater focus on switching to renewables, helped Brookfield shares in the quarter.”
7. TotalEnergies SE (NYSE:TTE)
Number of Hedge Fund Holders: 20
TotalEnergies SE (NYSE:TTE) is a French integrated oil and gas company that operates worldwide. The company has four segments – Integrated Gas, Renewables & Power, Exploration & Production, Refining & Chemicals, and Marketing & Services. The company’s renewables segment engages in electricity production from wind, solar, hydroelectric, and biogas sources. In addition to that, TotalEnergies SE (NYSE:TTE) also specializes in energy storage activities, bio-methane production units, and energy efficiency services.
On August 29, TotalEnergies SE (NYSE:TTE) announced that its Northern Lights carbon dioxide capture and storage venture made its first commercial agreement with Yara International. The venture will transport and store carbon dioxide captured from Yara’s Sluiskil ammonia and fertilizer plant in the Netherlands. Approximately 800,000 tons per year of CO2 will be captured and stored under the seabed in Norway, beginning in 2025.
TotalEnergies SE (NYSE:TTE) also reported on August 31 that it will deploy up to 4,400 charging stations for EVs in Flanders, Belgium over the coming two years. The charging stations will be operated under the TotalEnergies brand for 12 years, starting in September 2022, and will be supplied with 100% renewable electricity generated by offshore wind power.
According to the second quarter database of Insider Monkey, 20 hedge funds were bullish on TotalEnergies SE (NYSE:TTE), with combined stakes worth about $2 billion. Ken Fisher’s Fisher Asset Management featured as the leading position holder in the company, with roughly 27 million shares valued at $1.4 billion.
6. SunPower Corporation (NASDAQ:SPWR)
Number of Hedge Fund Holders: 21
SunPower Corporation (NASDAQ:SPWR) is a California-based company specializing in solar technology and energy services, offering storage and home energy solutions to customers. As a worldwide solar company, SunPower Corporation (NASDAQ:SPWR) provides high-efficiency solar panels in the Americas, Europe, Asia, and Oceania. The company’s Q2 earnings were in line with Wall Street estimates, GAAP revenues grew 60% year over year to $418 million, and SunPower added 19,700 new customers in Q2, a 51% YoY increase.
On August 18, Morgan Stanley analyst Stephen Byrd raised the price target on SunPower Corporation (NASDAQ:SPWR) to $31 from $22 and maintained an Equal Weight rating on the shares. The analyst lifted growth rates for solar, wind, energy storage, and clean hydrogen on the back of the clean energy support from the new Inflation Reduction Act.
According to Insider Monkey’s data, 21 hedge funds were bullish on SunPower Corporation (NASDAQ:SPWR) at the end of June 2022, with combined stakes worth about $125 million, compared to the same number of funds in the prior quarter, holding stakes in the company valued at $152.6 million. D E Shaw is a notable stakeholder of SunPower Corporation (NASDAQ:SPWR), with 2.5 million shares worth about $40 million.
In addition to SolarEdge Technologies, Inc. (NASDAQ:SEDG), First Solar, Inc. (NASDAQ:FSLR), and Sunnova Energy International Inc. (NYSE:NOVA), SunPower Corporation (NASDAQ:SPWR) is one of the top gainers in Europe’s shift to renewable energy sources.
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Disclosure: None. These 10 Renewable Energy Stocks Can Benefit as Europe Braces for Harsh Winter is originally published on Insider Monkey.
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