24 Feb It’s time to buy this under-the-radar wind stock poised to benefit from the latest climate bill, Bank of America says
Bank of America says it’s time for investors to buy this little-known wind blade manufacturer poised to capitalize on Inflation Reduction Act tailwinds. Analyst Julien Dumoulin-Smith double-upgraded shares of TPI Composites to buy from underperform, saying in a Thursday note to clients that shares are nearing a recovery, despite near term challenges like the ongoing transition to solar. “With shares only modestly off their all time lows and with cash burn backdrop abating in 1Q23E, we perceive an opportunistic moment to get more constructive,” he wrote, as investors seek out stocks tied to the Inflation Reduction Act and construction in Europe. TPIC YTD mountain TPI Composites shares so far this year Shares of the wind stock have jumped nearly 39% in 2023 after a 32% slump in 2022. The bank lifted it’s price target to $14 from $9, suggesting shares should remain rangebound near term. So far this week, shares gained nearly 11%, despite fourth-quarter earnings falling short of estimates, according to FactSet. “4Q results last night showed surprising confidence in inflection in 4Q as it appears confident to ramp back up with commitments (to keep facilities open – not necessarily utilize yet) in 2024,” he wrote. Among his reasons for the double-upgrade, Dumoulin-Smith cited a margin recovery and improving free cash flows. “With impressive operating leverage – we view their low single-digit EBITDA margin (implied by Street at 2.5% as perhaps higher, and most critically the ‘recovery’ EBITDA margin of high single digits as being effectively a ’25+ target,” he said. — CNBC’s Michael Bloom contributed reporting