Stocks are experiencing a rebound in their growth.
In the realm of sustainable investing, the winds of change are blowing favourably for green stocks. Experts, such as Gunter Greiner from WIWIN Green Impact Fund, predict a rising development for sustainable stocks this year, thanks to a confluence of favourable factors [1][4].
One of the key drivers is the decline in interest rates. This economic condition is considered a catalyst for an upturn in sustainable stocks, as it reduces the cost of financing for capital-intensive renewable projects, benefiting companies like Nordex (wind turbines), Schneider Electric (energy management and automation), and SMA Solar (solar inverters) [1].
The renewable energy sector is experiencing strong growth, with renewables accounting for 99% of new power generation capacity additions in Q1 2025, showcasing robust momentum in the solar and wind sectors [1]. This growth is underpinned by the sector's zero-emission advantages, cost competitiveness, and government incentives, making these stocks potentially attractive investments.
Positive analyst sentiment also plays a significant role. Analysts like John Kim have raised the price target for Nordex to 18 euros and recommended buying, while UBS has increased the price target for Schneider Electric from 260 to 270 euros [1][4]. Bernstein Research also recommends buying Schneider Electric.
However, it's important to note that while the outlook for green stocks is promising, investors should not overlook potential risks. Regulatory changes, supply chain constraints, and evolving market competition are factors that could impact the performance of these stocks. Diversifying within clean energy subsectors, including storage and grid management, may help reduce firm-specific risks.
The Green Future Index from BÖRSE ONLINE includes Nordex and Schneider Electric, reflecting their prominence in the sustainable stocks market. It's worth mentioning that Boersenmedien AG holds the rights to the Green Future Index and has a cooperation agreement with the issuers of the displayed securities, which includes remuneration from the issuers [1].
Sustainable companies, which are often dependent on a lot of external capital, can finance their operations more easily due to falling interest rates. Some sustainable companies, like Schneider Electric, are already reaping the benefits of this development, as evidenced by their solid sales in the third quarter [1].
As the new year unfolds, many experts believe that green stocks could potentially take off. Nordex, for instance, is well-positioned in Europe and sees potential for order intake in the USA in 2025 [1]. SMA Solar, too, has shown signs of recovery, testing the 21-day line after gaining over ten percent in a week, ending a long downtrend.
While the signs for green stocks changed again just before the end of the year, the reasons for this predicted turnaround remain unspecified. However, with renewed investor interest in the topic and a favourable macroeconomic environment, the stage seems set for a green revolution in the stock market.
[1] Source: [Article Link] [4] Source: [Article Link]
- The declining interest rates enhance the financing prospect for sustainable companies, as demonstrated by Schneider Electric's solid sales in the third quarter, making it an attractive investment option for those involved in financing and investing in technology.
- The boom in technology-driven sectors like renewable energy, fueled by zero-emission advantages, cost competitiveness, and government incentives, is encouraging investors to consider investing in green stocks, such as Nordex, Schneider Electric, and SMA Solar.
