Renewable energy: 1 analyst predicts a 51% rise for this FTSE 100 stock!
Terrific news for SSE (LSE: SSE) shares. In spite of a smattering of protests, including a certain red-capped president saying âStop the windmillsâ, a new wind farm development has been approved off the coast of the Scottish Borders.Â
The self-titled âUKâs clean energy championâ will be building what is expected to be the worldâs largest offshore wind farm. It will provide enough power for the annual energy needs of Scotland twice over!
Britainâs solar production reached a new high in 2025 (a third higher than 2024) and Net Zero 2050 inches ever closer. Could this backdrop make the FTSE 100 energy company a terrific stock to buy? Is the share price of the countryâs brightest green energy firm set to rise from here on out? Should I buy SSE shares?
Big targets
A brand spanking new windfarm does sounds promising. But the SSE share price moved about as much as one of its turbines on a windless day. That is to say, it didnât really move. The share price has been more or less level for about 10 years now, too.Â
SSE might be leading the world in its investment in green energy infrastructure. But, the markets arenât enamoured with the stock. All this investment is costly, too. SSE has high debt and a rebased dividend, both of which make this stock look less than attractive. Its forward dividend yield of 5.24% is competitive with other FTSE 100 companies. But, itâs some way below what Iâd hope to achieve as a total return.Â
Analystsâ forecasts offer hope for the share price with an average target that’s 33.2% higher over the next 12 months. One analyst is predicting a 51.4% increase!
A buy?
Personally, Iâm not buying stocks for the returns over a year. Looking longer term, though, the bigger question is that of windâs role as an energy source. If offshore windfarms can slot into a countryâs energy supply, then we might see SSE start to roll out the technology on a wider scale.Â
The firm has already expanded to other regions such as the SSE Airtricity division in Northern Ireland and the Republic of Ireland. But is the technology really there for a widescale rollout yet? The UK doesnât have enough battery storage for the wind it does produce.
The cost of wasted wind power this year has been £752m already. Thatâs money shelled out to wind farms to stop running because the grid canât handle the surplus electricity. The introduction of more advanced batteries may put a stop to this problem. It may also make SSE look like a great buy years from now. But itâs not a stock I will buy at this moment.
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John Fieldsend has no position in any of the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.
