Morgan Stanley has chosen stocks that will benefit from the green revolution.
Some you might expect, like SolarEdge (SEDG) - Get SolarEdge Technologies, Inc. Report and Sunrun (RUN) - Get Sunrun Inc. Report. Some you might not, like Chevron (CVX) - Get Chevron Corporation Report and General Motors (GM) - Get General Motors Company (GM) Report.
“The investment opportunity to fund the U.S. energy transition is significant, with [more than] $1.2 trillion in total spend necessary by 2030 in order to meet goals set in the Paris Climate Change Agreement, of which we estimate [around] $1.1 trillion is technically feasible,” Morgan Stanley analysts wrote, according to CNBC.
“Relatively few investors are assessing the entire spectrum of decarbonization technologies, and we believe investors can generate alpha from such a broad based approach, especially as energy policy in the U.S. evolves.”
Other possible surprises in addition to Chevron and GM: industrial gas supplier Linde (LIN) - Get Linde plc (LIN) Report and Canadian natural gas distributor Enbridge (ENB) - Get Enbridge Inc. Report.
GM and Ford Motor (F) - Get Ford Motor Company Report will benefit from the “long-duration theme of electrification of transport,” Morgan Stanley said. It said SolarEdge Technologies and Sunrun reap the rewards of the need for renewable energy and energy storage.
SolarEdge on Monday closed at $276.82, up 5.7%; Sunrun at $45.06, up 4.3%; Chevron at $107.13, down 0.85%; GM at $58.09, down 0.8%; Linde at $294.84, down 0.5%; Enbridge at $41.34, down slightly; QuantumScape at $23.21, down 0.2%; and TPI at $33.89, up 7.3%.
Morningstar puts fair value for SolarEdge at $184, for Chevron at $115, for GM at $68 for Linde at $312, for Enbridge at $44.