Ameresco: Start of a growth phase and new evaluation by Jefferies

Shares of Ameresco, a company specializing in energy and renewable energy projects, experienced a significant price increase of 9.1% in morning trading after investment bank Jefferies upgraded the stock from "Hold" to "Buy" and more than doubled the price target from $19 to $39. Jefferies highlighted reduced execution risks and decreased uncertainty related to the Inflation Reduction Act as the main reasons for this decision. Despite the stock's recovery from the lows in April, analysts see potential for further upside. Expected announcements on data centers and a revival of the project business are seen as future growth drivers. The investment bank described this as the beginning of a "growth era" for Ameresco after a challenging period. Ameresco shares are highly volatile, recording 58 movements of over 5% in the past year. The recent price increase illustrates that the market views this news as significant but not fundamentally business-changing. Recently, we reported an increase of 1.9% when the company, along with Republic Services and U.S. Energy, announced the completion of a renewable natural gas (RNG) facility. This facility at Lee County Landfill in Dixon, Illinois marks the 15th joint energy project between Ameresco and Republic Services, highlighting the strength of their partnership. Since the beginning of the year, Ameresco is up by 38%, but its stock, at $34.69, is still 10.5% below its 52-week high of $38.78 from September 2024. Investors who invested $1,000 in Ameresco five years ago would now see an investment of $1,092. Inspired by successful thematic investments from Microsoft to Alphabet and Coca-Cola to Monster Beverage, we also identify a little-known, profitable growth stock that benefits from the AI revolution.