Wednesday, December 8

Solaria. The rebound comes to the moment of truth

Punished by the fear of the burst of the renewable bubble, the shares of Solaria they hit rock bottom in early October. They were the worst in the entire Spanish stock market.

However, the market shifted its attention to fundamentals, fueling the company’s rebound, as bearish investors eased pressure on its stocks.

Now, the tables have turned for the shares of the renewable with the arrival of the third quarter.

Double-digit appreciation in October

In just over a month, Solaria has appreciated 27 percent on the IBEX 35, almost as much as the 29 percent that marks the correction of the titles in the accumulated of the present exercise.

The improvement has been possible thanks to the good moment that renewable shares are living, protagonists in 2020 and which have suffered a strong correction in 2021.

A couple of weeks ago, the Ministry for Ecological Transition held a 3,300 megawatt (MW) wind and photovoltaic energy auction to try to “directly reduce the price of electricity.”

In that week alone, Solaria added more than 13 percent and posted two consecutive rises above 5 percent, marking the best daily close since mid-August.

Resistance at 18 euros

Thus, Solaria, which was trading at the beginning of October at 13.6 euros, is now trading at 17.35 euros at the close of this Tuesday; a reflection of how the context for the company has changed.

“It left a pattern of upward continuity that it has validated and now the key is going to be the attack on the resistance that the stock has between 18 and 18.5 euros,” he explains. Josep Codina, magazine analyst Investment.

If that area is exceeded, the expert points out that Solaria “will definitively abandon the correction phase, leaving the lateral range.”

“It would be placed with a positive bias and with the intention of continuing to go back”, explains Codina.

However, if the shares were to enter negative territory again, the analyst would focus his attention on the area of ​​16 euros. To lose it, “yes that would complicate the outlook again” on its stock market run.

Potential to prolong the climb

Despite the risk of returning to the downward path, the consensus consulted by anticipates a clearly upward course.

According to the panel, the shares have a potential revaluation of 12 percent, which yields a target price of 19.42 euros. This would be the highest level of Solaria since last February, when it began to intensify the falls that it drags in the year.

With half the consensus in favor of betting on the purchase of securities, there is some division in the last recommendations that the company received throughout October.

On the one hand, you sign like Intermoney and BNP Paribas they exhausted their credit on the renewable and indicated the sale in their last reviews. Its experts also estimate a 12-month target price of 12.90 and 11.60 euros respectively.

On the other hand, the analysis departments of Alantra, JB Capital and Berenberg They are more optimistic: they all bet on the purchase of shares and set a target price above 20 euros, reaching 22 in the case of JB Capital.

They also coincide with the perspectives of the Spanish banking system.

At the beginning of October, Sabadell and Santander They reviewed their position, reaffirmed their buy recommendation and delivered target prices of € 21.70 and € 23.50 respectively, the latter being one of the highest levels projected for Solaria’s shares.