What Happened?
Shares of solar energy systems company Shoals (NASDAQ: SHLS) fell 6.8% in the afternoon session after President Donald Trump announced his administration would not approve new solar or wind power projects, causing a sell-off in the renewable energy sector.
The move came after President Donald Trump posted on his social media platform, Truth Social, that "We will not approve wind or farmer destroying Solar," adding, "The days of stupidity are over in the USA!!!" This statement escalated his campaign against renewable energy development. The remarks prompted a sector-wide sell-off, pressuring solar and wind stocks broadly. Other renewable energy companies also saw their shares plummet following the announcement, reflecting investor concern over the future of green energy projects under his administration.
The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks. Is now the time to buy Shoals? Access our full analysis report here, it’s free.
What Is The Market Telling Us
Shoals’s shares are extremely volatile and have had 62 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The previous big move we wrote about was 3 days ago when the stock gained 9.7% after it announced the groundbreaking of a major solar and energy storage project in Australia. The company, in partnership with PCL Construction and Gentari, has started work on the Maryvale Solar and Energy Storage Project in New South Wales. This facility is notable for being one of Australia's largest DC-coupled solar and battery energy storage systems. It is expected to deliver approximately 243 MW of solar generation capacity, which will be paired with 172 MW of battery storage. This significant project highlights Shoals' expansion and leadership in providing key electrical systems for the global energy transition market. The positive development was also complemented by recent analyst optimism, with Guggenheim recently raising its price target on the stock from $6.00 to $8.00.
Shoals is down 4.4% since the beginning of the year, and at $5.79 per share, it is trading 11% below its 52-week high of $6.50 from September 2024. Investors who bought $1,000 worth of Shoals’s shares at the IPO in January 2021 would now be looking at an investment worth $186.73.
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