New Energy Transition Valuations Hindered By Inflation Fears

C-MACC Weekly “CRETER” (Climate etc.)

New Energy Transition Valuations Hindered By Inflation Fears

• A significant observation from 4Q business updates is the variation in results and expectations that, in many cases, have changed notably relative to six months ago.
• Inflation concerns are impacting near to medium-term capital and expansion plans and making necessary capital raises for some much more complex.
• We conclude that winners will emerge among those with robust technologies and/or some that get creative with financing or accept some dilution.
• For now, we still favor the Industrial Gas companies – particularly Linde and Air Liquide. Bloom also looks compelling unless material inflation hurts module costs.
• Otherwise, we look at water, E-Waste, hydrogen tax credits (we think they may encourage the wrong projects), 4Q earnings results, and litigation prospects.

See PDF below for all charts, tables and diagrams