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TOTAL (TOT) Focuses on Renewables, to Buy 20% of Adani Green

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TOTAL SE (TOT - Free Report) announced that it has entered into an agreement to acquire a 20% interest in Adani Green Energy Limited from Adani Group. Per the agreement with Adani Group, TOTAL will acquire a 50% stake in a 2.35- gigawatt (GWac) portfolio of operating solar assets owned by Adani Green and 20% stake in Adani Green for a total investment of $2.5 billion.

This strategic investment of TOTAL is in sync with long-term goal of achieving 35 GW of gross production capacity globally from renewable sources by 2025 and adding 10 GW per year afterward. TOTAL has been entering into agreements, joint ventures and acquisitions; along with making investments through its unit SunPower Corporation (SPWR - Free Report) to expand renewable footprint.

Recently, TOTAL entered into a 50/50 joint venture with 174 Power Global, a unit of Hanwha Group, to develop 12 utility-scale solar and energy storage projects in the United States. The projects, whose combined capacity will be 1.6 GW, will be transferred to this joint venture from 174 Power Global’s development pipeline.

TOTAL’s Long-Term Plan

TOTAL has a goal of attaining net-zero emissions by 2050, and is gradually building the renewable portfolio and clean electricity generation that could account for up to 40% of sales by 2050. At 2020-end, its gross power generation capacity worldwide was around 12 GW, including close to 7 GW of renewable energy.

TOTAL’s entry into India’s renewable space with Adani Green can be a lucrative proposition for the former as India is currently aiming for 450-GW renewable energy by 2030. So, there is ample scope for growth in India’s renewable space, as demand for energy is constantly increasing.

Price Performance

In the past six months, TOTAL’s shares have outperformed the industry.

Zacks Rank

TOTAL currently has a Zacks Rank #3 (Hold). Some better-ranked stocks in the sector include Diamondback Energy Inc. (FANG - Free Report) and SolarEdge Technologies, Inc. (SEDG - Free Report) , each sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Diamondback Energy and SolarEdge Technologies delivered an average surprise of 121.2% and 25.2%, respectively, in the last four quarters.

The Zacks Consensus Estimate for 2021 earnings of Diamondback Energy and SolarEdge Technologies has moved up 25.4% and 4.6%, respectively, in the past 60 days.

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