Clearway Energy (CWEN) Gains But Lags Market: What You Should Know

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By Amit

Clearway Energy (CWEN) closed at $33.17 in the latest trading session, marking a +0.79% move from the prior day. The stock lagged the S&P 500’s daily gain of 1.29%. At the same time, the Dow added 0.78%, and the tech-heavy Nasdaq lost 4.94%.

Prior to today’s trading, shares of the company created by NRG Energy to acquire and operate natural gas, solar and wind plants had gained 0.8% over the past month. This has outpaced the Oils-Energy sector’s loss of 0.08% and lagged the S&P 500’s gain of 5.64% in that time.

Wall Street will be looking for positivity from Clearway Energy as it approaches its next earnings report date. This is expected to be February 23, 2023. The company is expected to report EPS of -$0.88, down 1157.14% from the prior-year quarter. Our most recent consensus estimate is calling for quarterly revenue of $313.21 million, down 1.51% from the year-ago period.

Any recent changes to analyst estimates for Clearway Energy should also be noted by investors. These revisions help to show the ever-changing nature of near-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the company’s business outlook.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an actionable rating system.

The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. Within the past 30 days, our consensus EPS projection has moved 18.85% higher. Clearway Energy currently has a Zacks Rank of #1 (Strong Buy).

In terms of valuation, Clearway Energy is currently trading at a Forward P/E ratio of 22.12. Its industry sports an average Forward P/E of 24.44, so we one might conclude that Clearway Energy is trading at a discount comparatively.

Meanwhile, CWEN’s PEG ratio is currently 2.21. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company’s expected earnings growth rate. CWEN’s industry had an average PEG ratio of 2.21 as of yesterday’s close.

The Alternative Energy – Other industry is part of the Oils-Energy sector. This industry currently has a Zacks Industry Rank of 176, which puts it in the bottom 31% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our individual industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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