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June 7, 2022, 7:59 a.m. EDT

Here are the stocks getting a ‘tailwind’ from White House’s pause on solar tariffs

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By Claudia Assis

Wall Street on Monday cheered news that the White House paused new tariffs on solar imports for two years, removing some of the uncertainty that has plagued solar stocks, and should also act to spur domestic production.

Shares of Array Technologies Inc. /zigman2/quotes/221735763/composite ARRY -7.09% , FTC Solar Inc. /zigman2/quotes/226387844/composite FTCI -10.09% , and Shoals Technology Group Inc. /zigman2/quotes/224105510/composite SHLS -6.38% rallied more than 20% on the news.

The companies make utility-scale solar trackers and accompanying software that tilt solar panels to follow the sun’s path in the sky, maximizing energy production.

Read more : Solar energy: Biden won’t impose tariffs for 2 years, pushes domestic production

The action Monday clears the picture for solar-module imports as well as U.S. project development “while setting the stage for domestic manufacturing to play a bigger role longer- term,” thus boding well for these utility-scale names, analysts at Piper Sandler said in a note.

Goldman Sachs analysts also singled out the three solar-tracker makers as the ones to watch, saying the action addresses the solar-panel constraints resulting from the anti-dumping investigation on solar panels made in Southeast Asia.

The ongoing investigation, started in March, “has been, by far, the most significant sector headwind for solar stocks over the past several months and one that has weighed heavily on investor sentiment,” the Goldman analysts said.

Tariffs could still be implemented in the future, but the risk of retroactive tariffs is likely off the table. Investors also cheered the Biden administration stepping in earlier than expected, which was “clearly an encouraging development,” the analysts at Goldman Sachs said.

The sector has weathered guidance cuts and weaker sentiment around first-quarter earnings season, but the news could provide a “floor” on estimate cuts as the second half of the year approaches, they said.

Solar stocks that also rallied after the news included residential solar installer Sunrun Inc. /zigman2/quotes/205021014/composite RUN -1.17% and integrated solar company SunPower Corp. /zigman2/quotes/200243424/composite SPWR -2.07% Solar-panel maker First Solar Inc. /zigman2/quotes/209356097/composite FSLR -3.39% was the sole name trading in the red on Monday.

The Goldman analysts expected that “the entire solar group will see a tailwind on the back of this news,” also adding utilities NextEra Energy Partners LP /zigman2/quotes/203407911/composite NEP -1.65% , AES Corp. /zigman2/quotes/209256253/composite AES -1.99% and NiSource Inc. /zigman2/quotes/208795963/composite NI -0.26% to the list of companies that would also benefit.

Analysts at Cowen sounded a little more cautious about the news in their note.

A two-year delay, they said, “is hardly clarity the industry is seeking as they would like this issue to go away or be resolved.”

Moreover, “the issue may still be challenged in court, and it is unclear on potential impact of tariffs that may be announced on past shipments,” the Cowen analysts said.

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US : U.S.: Nasdaq
$ 21.61
-1.65 -7.09%
Volume: 4.71M
Nov. 28, 2022 4:00p
P/E Ratio
N/A
Dividend Yield
N/A
Market Cap
$3.50 billion
Rev. per Employee
$3.10M
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/zigman2/quotes/226387844/composite
US : U.S.: Nasdaq
$ 1.96
-0.22 -10.09%
Volume: 1.73M
Nov. 28, 2022 4:00p
P/E Ratio
N/A
Dividend Yield
N/A
Market Cap
$225.16 million
Rev. per Employee
$890,435
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/zigman2/quotes/224105510/composite
US : U.S.: Nasdaq
$ 29.05
-1.98 -6.38%
Volume: 1.72M
Nov. 28, 2022 4:00p
P/E Ratio
249.79
Dividend Yield
N/A
Market Cap
$5.19 billion
Rev. per Employee
$402,202
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/zigman2/quotes/205021014/composite
US : U.S.: Nasdaq
$ 31.32
-0.37 -1.17%
Volume: 4.23M
Nov. 28, 2022 4:00p
P/E Ratio
107.70
Dividend Yield
N/A
Market Cap
$6.75 billion
Rev. per Employee
$188,658
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/zigman2/quotes/200243424/composite
US : U.S.: Nasdaq
$ 23.63
-0.50 -2.07%
Volume: 2.62M
Nov. 28, 2022 4:00p
P/E Ratio
74.90
Dividend Yield
N/A
Market Cap
$4.20 billion
Rev. per Employee
$444,889
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/zigman2/quotes/209356097/composite
US : U.S.: Nasdaq
$ 165.62
-5.81 -3.39%
Volume: 3.49M
Nov. 28, 2022 4:00p
P/E Ratio
187.95
Dividend Yield
N/A
Market Cap
$18.28 billion
Rev. per Employee
$525,885
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/zigman2/quotes/203407911/composite
US : U.S.: NYSE
$ 78.68
-1.32 -1.65%
Volume: 335,482
Nov. 28, 2022 4:00p
P/E Ratio
15.36
Dividend Yield
3.80%
Market Cap
$15.04 billion
Rev. per Employee
N/A
loading...
/zigman2/quotes/209256253/composite
US : U.S.: NYSE
$ 28.04
-0.57 -1.99%
Volume: 3.33M
Nov. 28, 2022 4:00p
P/E Ratio
N/A
Dividend Yield
2.25%
Market Cap
$19.11 billion
Rev. per Employee
$1.46M
loading...
/zigman2/quotes/208795963/composite
US : U.S.: NYSE
$ 27.22
-0.07 -0.26%
Volume: 5.75M
Nov. 28, 2022 4:03p
P/E Ratio
17.81
Dividend Yield
3.45%
Market Cap
$11.08 billion
Rev. per Employee
$763,834
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