Sunnova share price could more than double from here: Morgan Stanley

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Sunnova Energy International Inc (NYSE: NOVA) may remain volatile in the near term but has the potential to make its shareholders a happy lot over the next twelve months, as per a Morgan Stanley analyst.

Sunnova share price could climb to $35

Andrew Percoco assumed coverage of the energy company today with an “overweight” rating. He sees upside in this solar stock to $35 – a whopping 125% premium on its current price.

The analyst is bullish on Sunnova share price primarily because he expects continued rapid growth in clean energy.

We like NOVA’s exposure to a vastly under-penetrated market, with strong long term growth prospects and a growing product and service offering, at a discount valuation.

In February, the Houston-headquartered firm reported market-beating results for its fourth financial quarter. Versus its year-to-date high, NOVA is down 30% at writing.

Solar to turn more attractive moving forward

Percoco forecasts about a 15% increase in installations from 2022 to 2035. Solar, he added, will be more attractive moving forward as its cost continues to lower versus utility power.

Expansion into standby generation, electric vehicles charging, and energy storage will also help boost Sunnova share price, as per the analyst’s research note.

According to Percoco, Sunnova Energy is currently trading below the value of its contracts, which makes up for another good reason to own this solar stock especially considering that it’ll benefit from the Inflation Reduction Act as well.

Also on Monday, the Morgan Stanley analyst downgraded peers First Solar and Power Plug to “equal weight”.

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