Plug Power Inc.’s stock
PLUG,
fell 1.2% in early trade Thursday, after SIG Susquehanna downgraded the stock to neutral from positive and said it expects the residential alternative energy segment’s recent headwinds to continue into the first half of the year before a demand pickup. Analysts led by Biju Perincheril also downgraded SunPower Corp.
SPWR,
to neutral from positive. “Recent discussions with companies indicate the U.S. residential solar market demand remains weak, led by a slower than expected recovery in California from NEM (met energy metering) changes and softening demand in Southern states,” they wrote in a note to clients. “Companies noted some slight sequential improvement in non-CA markets to begin 4Q, but still expect an industrywide contraction in ’24.” The Solar Energy Industries Association, or SEIA, is expecting a 12% decline in U.S. residential installations in 2024, a 5% decline from its previous forecast, due to higher interest rates, flattening utility prices and net metering changes. SIG Susquehanna is expecting a nearly 10% decline for the U.S., factoring in a modest tailwind to demand in the second half as interest rates come down. “Looking beyond the near-term weakness, we think falling equipment prices, continued increase in utility rates, and potential improvement in cost of capital could all be tailwinds in 2H’24 and into ’25. We are modeling overall U.S. resi demand growth of 10-12% y/y in ’25,” the analysts wrote. SunPower’s stock was not yet active, but is down 79% in the last 12 months, while the S&P 500
SPX,
has gained 20.5%.
