FactSet StreetAccount publishes regular company-level and summary-style ESG news. Below is our recap of key ESG developments and insights over the past week.
Figure 1 summarizes select Q2 thematic company earnings results. On balance, earnings have been better than expected, notably in Cybersecurity and Solar segments. While both segments have been confronted with weak demand, stock performance has been better on average in the former. Cybersecurity companies discussed weak demand for software but with some signs of stabilization (F5 commentary), while US residential solar firms largely took down guidance for the coming quarters amid high interest rates and continued impact from California regulations. US solar component manufacturers, on the other hand, reported strong demand with support from domestic policy supports. The EV space saw mixed results with Tesla seeing continued margin concerns while Rivian’s increased production guidance surprised. Analysts remained positive on Hydrogen segment’s coming electrolyzer demand ramp, particularly in Europe, though company results remain challenged. Delays in US Treasury guidance on hydrogen production tax credits contributed; analysts also cited this as a challenge for Next Era Energy. Tailwinds from the Inflation Reduction Act were mentioned as a positive across segments, notably Mixed Renewables and Energy Storage.
Figure 1: Q2 earnings takeaways for select thematic companies
Sources: FactSet, as of 1:45pm ET; price changes for thematic buckets derived by StreetAccount, price percentile represents where current stock price sits relative to 52-week range
Thematic sectors mixed on the week. Cybersecurity stocks leading thematic gains amid a tech rally spurred by an AI-driven earnings beat from Nvidia. Palo Alto seeing gains following stronger-than-expected earnings on Friday; analysts noted confidence in company's positioning heading into an AI-dominated market. SentinelOne also gaining following reports company is exploring a potential sale.
Chinese solar pure plays lower this week while US names see mixed performance. The US Dept. of Commerce released its final determination on solar firms circumventing Chinese import tariffs. Canadian Solar (found to be circumventing) leading WTD losses following decision and a Q2 revenue miss. Other implicated companies BYD, Trina Solar and LONGi Green Energy's Vina Solar trading lower, in-line with broader Chinese solar sector. Exonerated companies seeing mixed performance; Jinko Solar (lower), Hanwha Q Cells (higher). Determination seen beneficial for US utility names; Shoals, Array, and NEXTracker all trading higher WTD.
US and EU wind energy names outperforming Chinese counterparts this week. TPI Composites up following Navistar partnership for International SuperTruck II development; follows sharp losses last week on customer Proterra’s bankruptcy. American Superconductor also moving higher, extending significant YTD gains. Conversely, Goldwind Science & Technology sliding following H1 earnings miss and subsequent downgrade. European wind names firmer on company news despite ongoing turbine quality concerns, which could reportedly cost Siemens Energy up to €4.5B. The US Dept. of Interior approved Orsted and Eversource's 704 MW Revolution wind project off Rhode Island coast; Nordex and Vestas announced new contracts.
Transition materials higher on the week with gains led by Australian lithium miners: Lake Resources (Kachi brine update) and Neometals (new Mercedes Benz order) North American miners also firmer, including Century Lithium and Talon Metals on encouraging production results.
In global news, Ecuadorians voted to reject oil drilling in Block 43 of the Amazon. Region is inhabited by multiple isolated Indigenous groups; UNESCO designated the area a world biosphere reserve in 1989. The International Trade Centre head warned EU rules to curb deforestation could cause disastrous impact on global trade. New Zealand will require farmers to pay for methane produced by sheep and cattle by the end of 2025. Japan discharged treated water from the Fukushima Daiichi nuclear power plant on Thursday; China banned seafood imports as a result. India set new emission limit for renewable sources to be classified 'green.' Union Power Minister stated India's energy mix will consist of 65% renewables by 2030.
The EU adopted Carbon Border Adjustment Mechanism rules for its transitional phase; tax will be implemented in 2026. EU industry executives claim both penalties and enforcing requirements are insufficient. The UK risks imposition of a climate surcharge for steel exports due to the rules. In the US, FEMA head warned Biden's $12 billion request for disaster-relief funding will only cover spending through end of September. Treasury missed deadline to release guidance on implementing the hydrogen production tax credit.
Hawaiian Electric was downgraded at Moody's and Fitch over Maui wildfire liability exposure. While utility is not looking to restructure, observers estimate it could face $4B of potential costs and bankruptcy risk. Amid the wildfires, fossil fuel firms sought dismissal of a climate accountability lawsuit filed in the state.
Unions approved labor agreements at American Airlines and UPS, avoiding strikes and boosting employee pay. Woodside reached an agreement in-principal with unions, averting strike and potential disruption to LNG supplies.
Landmark EU tech moderation regulations will come into effect on Friday, 25-August; platforms will need to restrict targeting ads to minors and refrain from using sensitive data in ads, in addition to submitting risk assessments and providing more content moderators in more languages. Activision announced plans to sell cloud gaming rights to Ubisoft in bid to win UK approval of Microsoft deal.
The US is increasing efforts to ensure ban of imported products made using forced labor; EV components from China to face scrutiny similar to that seen with solar components. Walmart and Centric brands investigating garment supply chains in Cambodia over allegations of illegal inmate labor. Boeing disclosed a new defect in the 737 Max jet due to improperly drilled holes by a supplier; issue may derail delivery targets.
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