Sunnova CEO forecasts a ‘pretty large demand pickup’: here’s why

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on Jul 8, 2024
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  • Sunnova CEO is bullish on what the future holds for solar power companies.
  • John Berger explained his constructive view in an interview with CNBC today.
  • Sunnova stock is currently down about 60% versus the start of this year.

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Solar stocks may do well moving forward now that we’re finally out of a “power bear market”, says John Berger.

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He’s chief executive of the Houston-headquartered Sunnova Energy International Inc (NYSE: NOVA).

Shares of the residential and commercial solar energy company are down some 60% year-to-date at writing.

Why is CEO Berger bullish on Sunnova stock?

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John Berger is bullish on what the future holds for the likes of Sunnova Energy as electric vehicles and rapid growth in artificial intelligence will likely translate to solid demand in the long run.

He’s positive on solar as he expects the “power bull market to last for quite a number of years”.

Hurricane Beryl is reiterating the need for a “reliable, cheap power” like solar in the United States, he told CNBC in an interview on Monday.

Sunnova stock is currently trading at about $6.0 only versus $54 during the pandemic in 2021.

Rate cuts could help boost solar demand

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John Berger talked the need for building the infrastructure for both residential as well as the commercial solar energy on “Money Movers”.

He’s optimistic also because he expects a “pretty large demand pickup” once the U.S. central bank decides in favour of beginning to cute interest rates.

Last week, Jerome Powell (Chair of the Federal Reserve) expressed content with the progress on inflation – feeding right into the broader expectations that he’ll start lowering rates at some point in 2024.

Note that NOVA share price is already up significantly versus $3.50 in early May.

IRA is a positive for the likes of NOVA

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Lastly, the chief executive of Sunnova Energy is constructive as he expects the Inflation Reduction Act to help boost cash flow moving forward.

We’re seeing a lot of investment, billions and billions of dollars in solutions the Inflation Reduction Act is supporting. IRA, in terms of majority, especially tax credits, will stay on hold regardless of who wins the White House.

Sunnova Energy is expected to report its financial results for the second quarter in the final week of July. Consensus is for it to lose 53 cents a share versus 74 cents per share a year ago.

Wall Street currently rates NOVA shares at “overweight”. Analysts see upside in them to over $10 on average which signals potential for a whopping 70% gain from here.

Sunnova stock

Note that the catalysts Sunnova CEO John Berger discussed with CNBC today may deliver a boost to industry peers like SunPower and SolarEdge Technologies as well. In fact, analysts at the Bank of America Securities upgraded SEDG from “underperform” to “neutral” on Monday.

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