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Clean Tech Companies In ‘Defense Mode’ Ahead Of Q4 Earnings, Yet Analyst Says This EV Stock May Offer Over 50% Upside

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As the clean tech sector faces headwinds amid liquidity concerns and weaker-than-expected demand, JPMorgan’s analysis suggests that clean tech companies are likely to adopt a defensive stance in the upcoming Q4 earnings.

Clean Tech Stocks Have Underperformed Market With 1 Exception

Clean tech stocks have largely underperformed the broad market over the past year. The only exception appears to be Enovix Corp (NASDAQ:ENVX).

JPMorgan remains bullish on Enovix’s potential for significant revenue growth, particularly in consumer electronics and the EV market. Analysts set a price target of $18 for the stock, grounded in cautious assumptions about manufacturing line installations, presenting a potential increase of over 50% from the current price levels (approximately $11.85 per share).

Clean Tech Has Largely Underperformed

On the other hand, the underperformance in the Clean Tech space has been more pronounced in sectors such as:

EV Charging – ChargePoint Holdings Inc (NYSE:CHPT) & EVgo Inc (NASDAQ:EVGO)
Hydrogen – Plug Power Inc (NASDAQ:PLUG)

“We expect Clean Tech companies to stay in defense mode broadly, with several likely to have experienced a challenging 4Q,” said JPMorgan analyst Bill Peterson.

These recent developments have garnered controversy and skepticism among investors:

Plug Power Stock Up 26% In 5 Days – Fundamental Rally Or Short Squeeze?Plug Power’s Rocky Road As Hydrogen Dreams Face Financial And Regulatory ChallengesChargePoint Trims Staff By 12%, Aiming For $33M In Annual Savings Amid EV Charging RaceEVgo’s Challenges Ahead: Analyst On How Price Competition And Regulatory Credits Could Impact Margins And ReturnsTesla Dominates EV Charging Race Installing 6,000 Fast Chargers In 2023, ChargePoint And EVgo Struggle To Keep Up: Report

The prevailing negative sentiment has led to a reluctance among investors to take long positions, with many opting to trim their holdings instead. Short interest across the sector has climbed to over 20%, indicating a cautious approach and aligning with the bottoming sentiment around the EV value chain.

Peterson anticipates that Clean Tech companies will continue to prioritize cost-saving initiatives and capex reduction throughout 2024, given the uncertain demand influenced by macroeconomic factors.

Enovix – Potential…

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