(News Bulletin 247) – While the ecological transition is becoming a long-term trend, investment companies intend to jump on the bandwagon. Moreover, all the indicators seem to be green.
‘80% of the countries in the world are now committed to net zero carbon and renewable energies are the cheapest sources of energy in most regions of the world’, emphasizes Xavier Chollet, portfolio manager at Pictet.
According to this specialist, the cost of clean energies are also in free fall: -80% for solar energy and -45% for the cost of onshore wind energy over the last decade. At the same time, the price of energy storage on lithium-ion batteries fell by 88%…
‘If the transition becomes interesting economically, this momentum will be unstoppable’, he believes.
The crisis in Ukraine, with the need to get out of dependence on Russian gas, could also be an opportunity for the sector and accelerate the transition.
Between the development of heat pumps, the rise of electric vehicles – with in particular the ban on the sale of new thermal vehicles from 2035 – and more broadly of electric mobility, ‘we are witnessing a massive electrification of the economy ‘, judge Xavier Chollet.
Due to the current rise in rates and short-term uncertainties, several securities are also trading at ‘very attractive’ valuations, while the consensus is already forecasting a drop in EPS in 2023. Consequence? ‘The rather rare opening of windows of investment opportunity’, underlines the specialist.
As such, several stocks are in favor with Pictet, such as Albermarle, an American chemical company specializing in lithium, an element that is at the heart of the ecological transition because of its role as a component essential batteries.
According to the data, the stock could experience an average annual growth in earnings per share of 54% between 2021 and 2025.
Other companies like Marvell Technology or Onsemi are expected to see average annual EPS growth of +20% and +18% respectively between 2021 and 2025.
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