This under-the-radar renewable energy stock could rally 25%
Shares of Ormat Technologies Inc (NYSE: ORA) are trading up this morning after a UBS analyst turned bullish on the renewable energy company.
Ormat stock is trading at a discount
On Tuesday, Jon Windham upgraded the Reno-headquartered firm to “buy” and raised his price target to $105 – a 25% premium on its previous close.
The analyst is convinced that the geothermal energy company, in the next four years, will double the annualised rate of its earnings growth to 10%.
This growth inflection is underpinned by a visible pipeline of new geothermal, solar, and storage projects expected to grow total capacity in operation by 30% by [year-end 2026].
Last week, this alternative energy technology name reported market-beating results for its fiscal fourth quarter. Ormat stock is currently roughly flat versus the start of the year.
Ormat stock to benefit from IRA
Windham expects the share price to get a boost from improving backlog and margins as well. Other reasons cited for the bullish view on Ormat stock include the Inflation Reduction Act.
We see likely additional upside from IRA driven demand for new standalone battery storage projects and state mandates in CA driving incremental U.S. geothermal demand through 2035.
The UBS analyst also expects Ormat Technologies Inc to significantly expand its geothermal portfolio in the coming years.
Versus its record high in early 2021, the renewable energy stock is currently down close to 30%, which, as per Windham, spells opportunity for investors interested in playing this space.
The post This under-the-radar renewable energy stock could rally 25% appeared first on Invezz.