The stock market didn't do its best last week, but investors seemed ready to get the new week off to a good start on Monday. Although markets gave up some of their morning rally, the S&P 500 (^GSPC 1.20%) remained higher by 0.6% as of 1:30 p.m. ET.
A trio of stocks was instrumental in sending the S&P upward. Union Pacific (UNP 0.78%) might not seem like the most exciting of stocks, but the railroad company provided some news that made shareholders more optimistic about its future. Meanwhile, SolarEdge Technologies (SEDG 4.15%) and Enphase Energy (ENPH 2.69%) compete in the solar space, but both benefit from signs of strong demand.
Read on to learn more about these three stocks and why they're on the rise Monday.
New leadership is coming down the tracks
Union Pacific shares rose 9% in midafternoon trading on Monday. The railroad stock giant provided an update over the weekend that showed that the company is listening to criticism from activist investors.
On Sunday, Union Pacific issued an update about its leadership succession planning process that set the stage for the departure of CEO Lance Fritz. Despite heralding Fritz's accomplishments in his role since 2017, Union Pacific started looking at a new path forward starting about a year ago, hiring an outside consultant to work with the board of directors in searching for a suitable successor as CEO.
In particular, the railroad isn't willing to settle for just any new chief executive. Instead, it's looking at highly qualified candidates who already have a strong record of success and expertise, both operationally and strategically. Union Pacific believes that it will be able to find a suitable successor CEO at some point during 2023.
Union Pacific admitted that its decision to go public with its succession planning stemmed from moves from activist investors at Soroban Capital Partners to play a more active role in driving a process forward. A letter from Soroban said that stakeholders in Union Pacific no longer had enough confidence in Fritz to justify his staying in the role.
Despite strong financial performance, the railroad stock hasn't moved much in the past two years, but shareholders believe that might change with a new person at the helm.
A day in the sun for SolarEdge and Enphase
Meanwhile, shares of SolarEdge Technologies and Enphase Energy were both up about 6%. The solar specialists have benefited from strong demand in the industry, and recent updates suggest the good times could continue into 2023.
Positive buzz stemmed from reports over the weekend that named Enphase among the top players in the clean energy industry. With legislation having bolstered incentives for investment in renewable energy, the solar microinverters that Enphase and SolarEdge make are only likely to see even greater demand in the years to come.
Wall Street analysts also jumped on board. Analysts at Janney Montgomery Scott boosted their rating on Enphase from neutral to buy, setting a stock target of $282 per share. Janney said it believes Enphase is increasingly attractive even as its stock price has fallen in recent weeks, and it doesn't expect product demand to wane. The analysts also believe that Enphase has a slight valuation discount compared to SolarEdge, although positive market trends from public solar power system installation specialists should benefit both companies.
Even during the bear market in 2022, Enphase and SolarEdge largely held their own, only giving up ground toward the end of the year. Now, investors are getting a rare opportunity to buy the two stocks below their all-time highs, and it doesn't seem as though anyone's wasting any time before taking advantage of this opportunity.
