CHICAGO, March 9, 2011 /PRNewswire/ -- Today, Zacks Equity Research discusses the Alternative Energy Industry, including CenterPoint Energy Inc. (NYSE: CNP), DPL Inc. (NYSE: DPL), DTE Energy Company (NYSE: DTE) and Public Service Enterprise Group Inc. (NYSE: PEG).
A synopsis of today's Industry Outlook is presented below. The full article can be read at http://www.zacks.com/stock/news/48670/Alternative+Energy+Industry+Outlook+%96+March+2011
The growth outlook of alternative energy companies is directly related to the fortunes of the economy and inversely to the prices of petroleum products. Trends on both fronts appear be favoring the alternative energy industry at present.
The U.S. economy has shaken off the negative momentum that appeared to be taking hold in the middle of 2010. The fourth quarter GDP report, despite the subsequent negative revision, is showing the resumption of sustainable economic growth. Importantly, the drivers of economic growth appear to have shifted the more stable consumer spending side.
Major economic reports, such as the ISM Indices, leading indicators and consumer confidence are all showing signs of renewed strength. Even the labor market appears to have turned the corner as the weekly jobless claims numbers and the February nonfarm payroll report showed.
The recent spike in oil prices in the wake of unrest in the Middle East has been casting a negative shadow over this emerging positive economic momentum. But we believe that a temporary oil spike will do limited, if any, damage to this emerging positive economic narrative. And we think that the fear premium in oil prices will come down as the situation in Libya improves.
This improving macroeconomic environment should have favorable impact on electricity demand. According to the Energy Information Administration (EIA), U.S. industrial electricity sales are expected to rise year-over-year by 1.7% in 2011 and 2.3% in 2012. This helps improve the operating environment of electricity generators and distributors.
A number of traditional utility companies have growing alternative energy operations. But the fortunes of some of these companies, particularly those with significant fossil-fuel exposures, are less attractive than their peers.
In the utilities space, we are less optimistic about the prospects of CenterPoint Energy Inc. (NYSE: CNP), DPL Inc. (NYSE: DPL), DTE Energy Company (NYSE: DTE) and Public Service Enterprise Group Inc. (NYSE: PEG).
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