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4 Renewable Energy Stocks Poised to Beat Q3 Earnings Estimates
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Factors like the Inflation Reduction Act (IRA) of 2022 and the rapid transition of electricity generation from carbon-fueled energy sources to renewables are likely to have favorably contributed to the third-quarter results of renewable energy stocks. We may expect moderate installation activities from the industry to have added an impetus to these stocks’ quarterly performance.
A handful of such renewable energy stocks from the Zacks alternative energy companies, which are part of the broader Zacks Oil-Energy sector, are set to release their third-quarter results soon. Renewable energy stocks like FREYR Battery (FREY - Free Report) , Enlight Renewable Energy , TC Energy (TRP - Free Report) and OPAL Fuels (OPAL - Free Report) are likely to post an earnings beat this time around.
Here’s What to Expect
Per a report by the American Clean Power Association, as of Jul 31, 2023, more than $270 billion in capital investment was announced for utility-scale renewable energy projects and manufacturing facilities since federal incentives were signed into law last August.
Such a solid investment strategy can be expected to have favorably contributed to the third-quarter results of the renewable energy companies in terms of modest installation activities.
As an evidence, NextEra Energy Partners (NEP - Free Report) , a prominent renewable energy company, witnessed a solid 21.5% year-over-year improvement in its third-quarter revenues. The company witnessed a record quarter of adding approximately 3,245 megawatts of new renewables and storage to its backlog. We may expect to witness a similar trend in the results of other renewable energy stocks.
Notably, factors like increasing average selling price of renewable products, more individuals switching from gasoline-powered vehicles to electric vehicles each year, as well as government subsidies such as those included in the IRA, are likely to have contributed to the renewable energy companies’ quarterly performance.
However, the rising price of steel, which is used to make the giant wind turbine blades, has been pushing up the cost of wind installation lately. Apart from steel, the most significant mineral requirements in the wind industry are copper, zinc, manganese, chromium, nickel, molybdenum and rare earths. The average price of these seven metals has risen 93% between January 2020 and March 2023 (as stated by an IMF report). As a result, the average per-megawatt cost of a wind turbine has increased 38% over the past two years, per a report by GlobalData.
Also, a sluggish demand environment observed in the U.S. solar market, owing to the increased interest expenses incurred by the installers, has resulted in a bit lower-than-expected installation activities along with fewer bookings, for a few solar stocks.
These factors, along with the overall rising cost of capital (thanks to the surging interest rates in the nation), might have adversely impacted the renewable energy companies’ overall performance to some extent.
Q3 Projections
Per the latest Earnings Preview, third-quarter earnings of the S&P 500 members from the Oil-Energy sector are expected to plunge 37.2% year over year. Revenues are likely to decline 17.5% during the same time frame.
Zacks Methodology
Given the high degree of diversity in the renewable energy space, finding the right stocks with the potential to beat on estimates might be quite a daunting task. However, our proprietary Zacks methodology makes this fairly simple.
We are focusing on stocks that have the combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold).
Our research shows that for stocks with this combination, the chances of an earnings surprise are as high as 70%.
Earnings ESP provides the percentage difference between the Most Accurate Estimate and the Zacks Consensus Estimate. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Our Choices
Below we present four stocks that are expected to come up with an earnings beat this reporting cycle.
FREYR Battery: It provides cluster-based R&D initiatives and the development of an ecosystem of scientific, commercial and financial stakeholders to support the expansion of the battery value chain. In September 2023, the company announced that it is ramping up its production at the Customer Qualification Plant in Mo i Rana, Norway, taking the U.S. technology from 24M Technologies to GWh scale. This should be duly reflected in its upcoming results in the form of solid revenue growth.
Enlight Renewable Energy: It provides a renewable energy platform that develops, finances, constructs, owns and operates utility-sale renewable energy projects. In September 2023, the company announced that it has started the commercial operation of the Arad Valley 1 project in Israel, with a solar generation capacity of 17 MW and a storage capacity of 31 MWh. This might have added more customers to ENLT’s database, thereby boosting its third-quarter revenues.
The company, with an Earnings ESP of +22.22% and a Zacks Rank #2 at present, is set to release third-quarter earnings soon. The Zacks Consensus Estimate for ENLT’s sales is pegged at $65.8 million, while that for earnings is pinned at 9 cents per share.
Enlight Renewable Energy Ltd. Price and EPS Surprise
TC Energy: It is a premier energy infrastructure provider in North America. In September 2023, the company announced the successful completion of the Bruce Power’s Major Component Replacement (MCR) Unit 6, which fully returned to service, thereby surpassing a significant milestone in Ontario’s largest clean-energy initiative. We may expect this to have favorably contributed to TRP’s third-quarter results.
The company, with an Earnings ESP of +0.37% and a Zacks Rank #3 at present, is set to release third-quarter earnings on Nov 8. The Zacks Consensus Estimate for TRP’s sales is pegged at $2.76 billion, while that for earnings is pinned at 71 cents per share.
OPAL Fuels: It is a vertically integrated renewable fuels platform involved in the production and distribution of renewable natural gas for the heavy-duty truck market. In September 2023, OPAL Fuels announced that it has entered into a 50/50 joint venture with South Jersey Industries to develop, construct, own and operate RNG facilities. The first facility (the Atlantic RNG facility) will be at the Atlantic County Utilities Authority solid waste landfill in Egg Harbor Township, NJ. We may expect more development on this joint venture once OPAL releases its third-quarter results.
The company, with an Earnings ESP of +16.67% and a Zacks Rank #2 at present, is set to release third-quarter earnings on Nov 13. The Zacks Consensus Estimate for OPAL’s sales is pegged at $76.6 million, indicating a 15.1% improvement from the year-ago quarter’s level.
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4 Renewable Energy Stocks Poised to Beat Q3 Earnings Estimates
Factors like the Inflation Reduction Act (IRA) of 2022 and the rapid transition of electricity generation from carbon-fueled energy sources to renewables are likely to have favorably contributed to the third-quarter results of renewable energy stocks. We may expect moderate installation activities from the industry to have added an impetus to these stocks’ quarterly performance.
A handful of such renewable energy stocks from the Zacks alternative energy companies, which are part of the broader Zacks Oil-Energy sector, are set to release their third-quarter results soon. Renewable energy stocks like FREYR Battery (FREY - Free Report) , Enlight Renewable Energy , TC Energy (TRP - Free Report) and OPAL Fuels (OPAL - Free Report) are likely to post an earnings beat this time around.
Here’s What to Expect
Per a report by the American Clean Power Association, as of Jul 31, 2023, more than $270 billion in capital investment was announced for utility-scale renewable energy projects and manufacturing facilities since federal incentives were signed into law last August.
Such a solid investment strategy can be expected to have favorably contributed to the third-quarter results of the renewable energy companies in terms of modest installation activities.
As an evidence, NextEra Energy Partners (NEP - Free Report) , a prominent renewable energy company, witnessed a solid 21.5% year-over-year improvement in its third-quarter revenues. The company witnessed a record quarter of adding approximately 3,245 megawatts of new renewables and storage to its backlog. We may expect to witness a similar trend in the results of other renewable energy stocks.
Notably, factors like increasing average selling price of renewable products, more individuals switching from gasoline-powered vehicles to electric vehicles each year, as well as government subsidies such as those included in the IRA, are likely to have contributed to the renewable energy companies’ quarterly performance.
However, the rising price of steel, which is used to make the giant wind turbine blades, has been pushing up the cost of wind installation lately. Apart from steel, the most significant mineral requirements in the wind industry are copper, zinc, manganese, chromium, nickel, molybdenum and rare earths. The average price of these seven metals has risen 93% between January 2020 and March 2023 (as stated by an IMF report). As a result, the average per-megawatt cost of a wind turbine has increased 38% over the past two years, per a report by GlobalData.
Also, a sluggish demand environment observed in the U.S. solar market, owing to the increased interest expenses incurred by the installers, has resulted in a bit lower-than-expected installation activities along with fewer bookings, for a few solar stocks.
These factors, along with the overall rising cost of capital (thanks to the surging interest rates in the nation), might have adversely impacted the renewable energy companies’ overall performance to some extent.
Q3 Projections
Per the latest Earnings Preview, third-quarter earnings of the S&P 500 members from the Oil-Energy sector are expected to plunge 37.2% year over year. Revenues are likely to decline 17.5% during the same time frame.
Zacks Methodology
Given the high degree of diversity in the renewable energy space, finding the right stocks with the potential to beat on estimates might be quite a daunting task. However, our proprietary Zacks methodology makes this fairly simple.
We are focusing on stocks that have the combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold).
Our research shows that for stocks with this combination, the chances of an earnings surprise are as high as 70%.
Earnings ESP provides the percentage difference between the Most Accurate Estimate and the Zacks Consensus Estimate. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Our Choices
Below we present four stocks that are expected to come up with an earnings beat this reporting cycle.
FREYR Battery: It provides cluster-based R&D initiatives and the development of an ecosystem of scientific, commercial and financial stakeholders to support the expansion of the battery value chain. In September 2023, the company announced that it is ramping up its production at the Customer Qualification Plant in Mo i Rana, Norway, taking the U.S. technology from 24M Technologies to GWh scale. This should be duly reflected in its upcoming results in the form of solid revenue growth.
The company, with an Earnings ESP of +26.58% and a Zacks Rank #3 at present, is slated to release earnings on Nov 9. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for FREY’s sales is pinned at $0.09 million.
FREYR Battery Price and EPS Surprise
FREYR Battery price-eps-surprise | FREYR Battery Quote
Enlight Renewable Energy: It provides a renewable energy platform that develops, finances, constructs, owns and operates utility-sale renewable energy projects. In September 2023, the company announced that it has started the commercial operation of the Arad Valley 1 project in Israel, with a solar generation capacity of 17 MW and a storage capacity of 31 MWh. This might have added more customers to ENLT’s database, thereby boosting its third-quarter revenues.
The company, with an Earnings ESP of +22.22% and a Zacks Rank #2 at present, is set to release third-quarter earnings soon. The Zacks Consensus Estimate for ENLT’s sales is pegged at $65.8 million, while that for earnings is pinned at 9 cents per share.
Enlight Renewable Energy Ltd. Price and EPS Surprise
Enlight Renewable Energy Ltd. price-eps-surprise | Enlight Renewable Energy Ltd. Quote
TC Energy: It is a premier energy infrastructure provider in North America. In September 2023, the company announced the successful completion of the Bruce Power’s Major Component Replacement (MCR) Unit 6, which fully returned to service, thereby surpassing a significant milestone in Ontario’s largest clean-energy initiative. We may expect this to have favorably contributed to TRP’s third-quarter results.
The company, with an Earnings ESP of +0.37% and a Zacks Rank #3 at present, is set to release third-quarter earnings on Nov 8. The Zacks Consensus Estimate for TRP’s sales is pegged at $2.76 billion, while that for earnings is pinned at 71 cents per share.
TC Energy Corporation Price and EPS Surprise
TC Energy Corporation price-eps-surprise | TC Energy Corporation Quote
OPAL Fuels: It is a vertically integrated renewable fuels platform involved in the production and distribution of renewable natural gas for the heavy-duty truck market. In September 2023, OPAL Fuels announced that it has entered into a 50/50 joint venture with South Jersey Industries to develop, construct, own and operate RNG facilities. The first facility (the Atlantic RNG facility) will be at the Atlantic County Utilities Authority solid waste landfill in Egg Harbor Township, NJ. We may expect more development on this joint venture once OPAL releases its third-quarter results.
The company, with an Earnings ESP of +16.67% and a Zacks Rank #2 at present, is set to release third-quarter earnings on Nov 13. The Zacks Consensus Estimate for OPAL’s sales is pegged at $76.6 million, indicating a 15.1% improvement from the year-ago quarter’s level.
OPAL Fuels Inc. Price and EPS Surprise
OPAL Fuels Inc. price-eps-surprise | OPAL Fuels Inc. Quote