The brokerage upgraded RUN, NOVA, and FSLR to "overweight"
Wells Fargo upgraded solar stocks Sunrun Inc (NASDAQ:RUN), Sunnova Energy International Inc (NYSE:NOVA), and First Solar Inc (NASDAQ:FSLR) to "overweight" today. The firm is bullish on the clean energy industry due to strong underlying demand, particularly in Europe, as well as legislative support stateside, and added it favors solar over hydrogen. However, the brokerage also sees near-term headwinds from the Fed's rate tightening.
Sunrun stock is up 2.9% at $22.87 at last glance, and down 27.9% year-over-year. The security is overdue for a short-term bounce however, as per its 14-day relative strength index (RSI) of 13.9, which sits firmly in "oversold" territory. Plus, short interest represents 13.8% of the stock's available float, or nearly four days' worth of pent-up buying power.
NOVA is staging a bigger bounce, up 3.7% at $17.73 at last check. Down 25.1% year-over-year, the stock has struggled with pressure at the $24 level over the past few months. The stock is seeing attractively priced premiums at the moment, per it's Schaeffer's Volatility Index (SVI) of 74%, which sits in the 9th percentile of its annual range. Furthermore, its Schaeffer's Volatility Scorecard (SVS) sits at a 93 out of 100, meaning NOVA has exceeded option traders' volatility expectations during the past year.
First Solar stock is having the best day out of the three, up 6.5% at $154.89 at last glance. The outperforming energy name is up 85.4% year-over-year, and the 100-day moving average caught a pullback in the last session. An unwinding of pessimism in the options pits could send FSLR higher still, as its 10-day put/call volume ratio of 2.60 at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) ranks in the 98th percentile of its annual range.