Back to top

Bear of the Day: Clearway Energy (CWEN)

Read MoreHide Full Article

The long-term prospects of alternative energy player Clearway Energy (CWEN - Free Report)  may still be perplexing but unfortunately, there may be more short-term risk ahead landing its stock a Zacks Rank #5 (Strong Sell) and the Bear of the Day.

After widely missing earnings expectations for two consecutive quarters investors may want to curb their enthusiasm for Clearway’s luring 6.34% annual dividend yield amid weak renewable resource conditions and lower natural gas prices.

U.S. Energy Information Administration
Image Source: U.S. Energy Information Administration

Weak Q3 Results: Notably, the Zacks Alternative Energy-Other Industry is in the bottom 39% of over 250 Zacks industries and Clearway’s Q3 results in November alluded to a tougher operating environment.

While Q3 sales of $371 million topped estimates by 8% earnings of $0.03 a share fell a very concerning -94% below expectations of $0.55 a share. This comes after Q2 earnings of $0.33 a share missed the Zacks Consensus of $0.55 a share by -40% in August.

Zacks Investment Research
Image Source: Zacks Investment Research

Weaker Outlook: Largely attributing to Clearway’s strong sell rating, annual earnings estimates for fiscal 2023 are down -10% over the last 60 days while FY24 EPS estimates have fallen -11%.

Zacks Investment Research
Image Source: Zacks Investment Research

On top of this, Clearway’s stock is already down -21% this year to vastly underperform the broader indexes and trail its Zacks Subindustry’s -14%.

Zacks Investment Research
Image Source: Zacks Investment Research


While it’s far too soon to call Clearway Energy’s stock a value trap, investors may want to think twice before investing in the company at the moment considering its lucrative dividend yield but poor performance of late.

See More Zacks Research for These Tickers

Normally $25 each - click below to receive one report FREE:

Clearway Energy, Inc. (CWEN) - free report >>

Published in