Wells Fargo is more bullish on shares of First Solar , Sunnova Energy and Sunrun , expecting margins to improve as supply chains loosen and raw material costs fall. Analyst Michael Blum raised all three clean energy reserves to overweight in a note to clients on Friday, citing growing demand for solar amid the energy crisis. in Europe and recently passed the Inflation Reduction Act in the US. a short-term headwind, fundamentals and regulation will be much improved in 2023 and beyond,” he wrote. “With most regulations protruding in the rearview mirror, underlying demand is strong. strong (especially in Europe) and regulatory support from the IRA, we’re turning more bullish.” Shares of all three stocks were up more than 1% before the bell, Blum said. regulatory hurdles, while improving margins and supply chains will also benefit these stocks in the months — and years to come, he added. Shares of First Solar have grown steadily in 2022, increasing by nearly 72% and benefiting from the shift to alternative energy amid volatile oil markets Many have also seen solar energy reserves as the main beneficiaries of the government’s climate bill tax credits. The low waists associated with IRAs are likely to be bearish in stocks at this point, but the potential for continued capacity expansion in the coming years could drive further upside,” Blum wrote, while also raising his target. My stock price target is $188, reflecting a 29% increase from Thursday’s closing price. Meanwhile, Blum expects Sunnova and Sunrun to benefit from their power purchase agreement models ready to be reached next year. “Various add-on tools (e.g. low-income projects, domestic assets, and energy communities) are only available for solar financing arrangements structured as leases /PPA,” Blum said. This will allow both companies to garner more tax credits and beat smaller residential solar providers. Blum raised its price target for Sunrun to $32 a share, while also slashing expectations for Sunnova to $24. That implies a 44% and 40% gain from Thursday’s closing price per share. – Michael Bloom of CNBC contributed reporting