What happened
Shares of solar energy stock ReneSola (SOL 8.88%) jumped on Wednesday after being upgraded by analysts at Roth Capital. The stock was up 9.4% at 12:30 p.m. ET.
So what
Analysts at Roth Capital upgraded ReneSola shares to a buy rating with a $10 price target. This follows an upgrade from Raymond James on Tuesday to an outperform rating with a $12.50 price target.
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Given the stock's price of $6.70 per share as I'm writing this, these price targets provide significant upside. And shares have sold for as high as $35.77 in the past year, so investors have priced the stock above those levels fairly recently.
Now what
Analyst upgrades or downgrades can move stocks in the short term, but they don't drive a business' fundamentals, which are ultimately what will drive the stock. That said, I think we're seeing analysts who are buying into the long-term value that ReneSola is building with its solar projects.
ReneSola was profitable in each of the last two quarters and has a mid-to-late-stage pipeline of 2 gigawatts. That's a large potential backlog, and if the company can sell projects profitably, this could be a big winner for solar investors in the long term.
