Bear of the Day: Clearway Energy (CWEN)

The long-term prospects of alternative energy player Clearway Energy CWEN may still be perplexing but unfortunately, there may be more short-term risk ahead landing its stock a Zacks Rank #5 (Strong Sell) and the Bear of the Day.

After widely missing earnings expectations for two consecutive quarters investors may want to curb their enthusiasm for Clearway’s luring 6.34% annual dividend yield amid weak renewable resource conditions and lower natural gas prices.

U.S. Energy Information Administration
Image Source: U.S. Energy Information Administration

Weak Q3 Results: Notably, the Zacks Alternative Energy-Other Industry is in the bottom 39% of over 250 Zacks industries and Clearway’s Q3 results in November alluded to a tougher operating environment.

While Q3 sales of $371 million topped estimates by 8% earnings of $0.03 a share fell a very concerning -94% below expectations of $0.55 a share. This comes after Q2 earnings of $0.33 a share missed the Zacks Consensus of $0.55 a share by -40% in August.

Zacks Investment Research
Image Source: Zacks Investment Research

Weaker Outlook: Largely attributing to Clearway’s strong sell rating, annual earnings estimates for fiscal 2023 are down -10% over the last 60 days while FY24 EPS estimates have fallen -11%.

Zacks Investment Research
Image Source: Zacks Investment Research

On top of this, Clearway’s stock is already down -21% this year to vastly underperform the broader indexes and trail its Zacks Subindustry’s -14%.

Zacks Investment Research
Image Source: Zacks Investment Research

Takeaway

While it’s far too soon to call Clearway Energy’s stock a value trap, investors may want to think twice before investing in the company at the moment considering its lucrative dividend yield but poor performance of late.

Top 5 ChatGPT Stocks Revealed

Zacks Senior Stock Strategist, Kevin Cook names 5 hand-picked stocks with sky-high growth potential in a brilliant sector of Artificial Intelligence. By 2030, the AI industry is predicted to have an internet and iPhone-scale economic impact of $15.7 Trillion.

Today you can invest in the wave of the future, an automation that answers follow-up questions … admits mistakes … challenges incorrect premises … rejects inappropriate requests. As one of the selected companies puts it, “Automation frees people from the mundane so they can accomplish the miraculous.”

Download Free ChatGPT Stock Report Right Now >>

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

Clearway Energy, Inc. (CWEN) : Free Stock Analysis Report

To read this article on Zacks.com click here.

Zacks Investment Research

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

More Related Articles

Info icon

This data feed is not available at this time.

Sign up for Smart Investing to get the latest news, strategies and tips to help you invest smarter.