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Why Shares of TPI Composites Jumped 14% in January

By Scott Levine - Updated Feb 6, 2021 at 12:15PM

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With the wind in its sails, this wind blade manufacturer benefited from a bullish beginning to 2021.

What happened

Climbing 74% in 2020, shares of TPI Composites (TPIC 4.87%) maintained their momentum in the first month of 2021. According to data from S&P Global Market Intelligence, shares of the wind blade manufacturer's stock bounced 14% higher in January.

In addition to some favorable opinions from Wall Street, investors bought shares in response to enthusiasm for renewable energy that has been growing since President Biden moved into the Oval Office.

Aerial view of offshore wind turbines.

Image source: Getty Images.

So what

After drawing favorable attention from several Wall Street firms in December, TPI Composites stayed on analysts' radar in January. Early in the month, for example, Joseph Osha, an analyst at JMP Securities, boosted his price target to $78 from $47, according to The new price target represented 42% upside from where the stock had opened on the day Osha's rating was reported. Investors certainly took note; on the day  Osha's take was published, shares closed nearly 7% higher than the day before.

Later in the month, an additional yet more measured bullish take came from JPMorgan analyst Paul Coster, who raised his price target to $55 from $48 while maintaining a neutral rating on the stock. Similarly, Jon Windham, an analyst at UBS Securities, hiked his price target to $69 from $51 shortly thereafter.

Besides analysts' ratings, President Biden's clear embracing of renewable energy motivated investors to power their portfolios with TPI Composites last month. Among the first actions Biden took after his inauguration was to sign an order signaling the United States' rejoining of the Paris Agreement. Only a few days later, further support of clean energy solutions came in the form of Biden signing an executive order that targets doubling the nation's offshore wind capacity by 2030.

Now what

While several analysts remain bullish on TPI Composites, there were some bearish takes as well in January, predicated on the belief that the stock's valuation was getting slightly ahead of itself. Consequently, investors should remember to take analysts' opinions with a grain of salt and instead base investments on the company's fundamentals -- not the whims of Wall Street. Nonetheless, the future appears bright for this green energy leader, so interested investors should be curious to see what the company reports in terms of Q4 2020 earnings later this month. I know I will be.

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