3 Solar Stocks Worth Investing In Ahead Of Q4 Earnings

Year 2018 was not quite satisfactory for U.S. solar stocks, thanks to President Trump’s unfavorable stance on renewable energy issues. Nevertheless, the solar industry ended the year on a better note.  

Coming to fourth-quarter performance, the industry outperformed its broader sector. Evidently, the solar market lost 13.7% in the December quarter compared with the Zacks Oil-Energy sector’s decline of 22.2%.

We have briefly mentioned some projections that should make investors confident enough about the below mentioned solar stocks’ capability to post strong fourth-quarter numbers.

Tariff is Not a Headwind Anymore

At the onset of 2018, Trump had imposed a 30% tariff on the import of solar panels. This dealt a major blow to solar industry and pulled stocks down. Per the latest U.S. Solar Market Insight Report from Wood Mackenzie Power & Renewables and the Solar Energy Industries Association (SEIA), the U.S. solar market was down 15% year over year in the third quarter of 2018, with this tariff being the prime culprit.

However, the picture improved in the fourth quarter. Notably, the report forecasts 3.5 gigawatts (GW) of utility photovoltaic (PV) for the soon-to-be-reported quarter, representing the biggest quarter for utility PV installations since the fourth-quarter of 2016, even with the tariffs.  So, the import tariff can be ruled out as a major growth inhibitor in Q4.

Bright Earnings Prospects

Stocks in the Zacks Oil-Energy sector, which includes solar stocks, are expected to exhibit year-over-year earnings growth of 64.7% on 15.2% revenue growth in the fourth quarter. This should further boost investors’ optimism for solar stocks.

What’s the Picture Ahead?

Looking beyond Q4, prospects remain bright for U.S. solar players. This is because, even after the imposition of such steep tariffs, U.S. utilities continue to transition to becoming a pure clean energy player, with investments pouring in from big corporates.

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Disclosure: Officers, directors and/or employees of Zacks Investment Research may own or have sold short securities and/or hold long and/or short positions in options that are mentioned in this ...

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