ESG, Recycling, & Climate | Monthly Thematic Piece

New Energy Transition Valuations Hindered By Inflation Fears
February 16, 2022
Products Mentioned:
Carbon, Hydrogen, Coal, Petcoke, Water, Polyethylene, PVC, E-Waste, Aluminum, Steel, Glass, Paper, Renewable Diesel, SAF, Oxygen
Companies Mentioned:
Linde, Chevron, Bloom Energy, Flux Power, Air Liquide, Air Products, Aviva, Westlake, Neste, Michelin, LyondellBasell, Dow, Ecolab, DuPont, 3M, Suez, Pentair PLC, Evoqua, Xylem, Badger Meter, Energy Recovery, Itron, Primo Water, Consolidated Water., LiqTech International, Kinder Morgan, CF Industries
Subjects Covered:
Recycling, Renewables, Carbon Capture, Emissions, New Energy, The Hydrogen Economy, ESG Investing

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.

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