Recommendation: Buy
| Entry Date | Symbol | Recommendation | Entry Price (USD) | Target 1 (USD) | Target 2 (USD) | Holding Duration | Potential Upside* |
|---|---|---|---|---|---|---|---|
| 12 Mar, 25 | HASI | Buy | USD 28.61 | USD 30.0 | USD 31.8 | 26 days | 11.1% |
*Potential Upside (%) indicates the expected percentage increase from the Entry Price to the Target 2 Price.
Data Powered by EOD Historical Data (“EODHD”).
Hannon Armstrong Sustainable Infrastructure Capital, Inc. provides capital and services to the energy efficiency, renewable energy, and other sustainable infrastructure markets in the United States. The company's projects include building or facility that reduce energy usage or cost through the use of solar generation and energy storage or energy efficiency improvements, including heating, ventilation, and air conditioning systems (HVAC), as well as lighting, energy controls, roofs, windows, building shells, and/or combined heat and power systems. It also focuses in the areas of grid connected projects that deploy cleaner energy sources, such as solar and wind to generate power; and sustainable infrastructure projects, including upgraded transmission or distribution systems, water and storm water infrastructures, transportation fleet enhancements, renewable natural gas plants, and other projects. The company qualifies as a real estate investment trust for U.S. federal income tax purposes. It generally would not be subject to federal corporate income taxes if it distributes at least 90% of its taxable income to its stockholders. The company was founded in 1981 and is headquartered in Annapolis, Maryland.
Higher Investment Yields – New portfolio asset yields exceeded 10.5% in 2024, compared to more than 9% in 2023, reflecting improved returns on deployed capital and a favorable investment environment.
Strong Earnings Growth – Adjusted EPS increased 10% year-over-year, rising from $2.23 in 2023 to $2.45 in 2024, demonstrating consistent profitability and financial strength.
Rising Interest Expense – Interest expense increased by $71 million year-over-year, from $171 million in 2023 to $242 million in 2024, due to higher outstanding debt balances and elevated interest rates, impacting overall profitability.
Decline in GAAP Net Investment Income – GAAP net investment income fell from $58 million in 2023 to $24 million in 2024, a 59% decrease, highlighting potential pressure on traditional income streams.
Key investment risks for HASI include interest rate volatility impacting borrowing costs, regulatory and policy changes affecting sustainable infrastructure incentives, credit risk from counterparties in renewable energy projects, and market fluctuations influencing asset valuations and liquidity.
| Entry Price | Support* | Target 1 | Target 2 |
|---|---|---|---|
| 28.61 | 26.5 | 30.0 | 31.8 |
Data Source: REFINITIV, Analysis: StockNextt
*Support can be considered as an indicative stop-loss, and if prices move below that level on closing basis individuals may evaluate exiting the position depending on their risk appetite, previous holdings, and other factors considered. The support and resistance levels may need to be re-evaluated within 4-6 weeks’ time frame depending on the stock price movements from the date of recommendation on the stock.
Financial Performance and Earnings Growth
HA Sustainable Infrastructure Capital, Inc. (NYSE: HASI), a leading investor in sustainable infrastructure assets, has announced its financial results for the fourth quarter and full year of 2024. The company reported a GAAP earnings per share (EPS) of $1.62 on a fully diluted basis, reflecting an increase from $1.42 in 2023. Adjusted EPS grew 10% year-over-year to $2.45. GAAP net investment income declined to $24 million from $58 million in 2023, while adjusted net investment income increased 22% to $264 million. HASI successfully closed $2.3 billion in investments during the year, expanding managed assets by 11% to $13.7 billion and its portfolio by 6% to $6.6 billion.
Strong Investment Activity and Portfolio Growth
HASI demonstrated robust investment activity in 2024, closing a record $1.1 billion in new transactions in the fourth quarter alone. The company’s portfolio remained well-diversified across clean energy end markets, with behind-the-meter assets totaling $3.1 billion, grid-connected assets at $2.6 billion, and fuels, transport, and nature assets at $0.9 billion. New portfolio investments were underwritten at a weighted average yield exceeding 10.5%, an increase from over 9% in 2023, reflecting strong returns on deployed capital.
Sustainability and Impact Achievements
The company continued to make significant contributions to sustainability through its investment activities. Transactions closed in 2024 are expected to result in the avoidance of approximately 872 thousand metric tons of carbon emissions annually, achieving a CarbonCount® score of 0.39 metric tons per $1,000 invested. Overall, HASI’s managed assets are estimated to prevent more than 8 million metric tons of carbon emissions each year, reinforcing its commitment to environmental impact.
Revenue and Expense Trends
HASI reported total revenue of $384 million for the year ended December 31, 2024, marking a 20% increase from $320 million in 2023. This growth was driven by a $63 million rise in interest and securitization asset income, partially offset by a $19 million decrease in rental income due to the sale of real estate assets. Gain on asset sales increased by $12 million, and other income rose by $8 million, partly attributed to asset management fees. Interest expense grew by $71 million due to higher outstanding debt balances and increased interest rates, while general and administrative expenses rose by $19 million, reflecting overall business growth and temporary servicing activities.
Capital Structure and Leverage Position
As of December 31, 2024, HASI maintained a strong balance sheet with $130 million in cash and cash equivalents and total debt outstanding of $4.4 billion. The company’s debt-to-equity ratio stood at 1.8, within its target range of 1.5 to 2.0 and below its internal limit of 2.5. Notably, 100% of HASI’s debt was fixed-rate as of year-end, compared to 92% in 2023, mitigating exposure to rising interest rates.
Extended Guidance and Dividend Announcement
HASI reaffirmed its guidance for 8% to 10% annual adjusted EPS growth through 2026 and extended it to 2027, with a projected midpoint of $3.15 per share by that year. The company also expects its dividend payout ratio to decline to between 55% and 60% of adjusted EPS by 2027. In line with this outlook, HASI’s Board of Directors declared a quarterly cash dividend of $0.42 per share, payable on April 18, 2025, to shareholders of record as of April 4, 2025.
Considering recent key business, financial updates, current trading levels, and key business risks, a ‘Buy’ recommendation has been given on HA Sustainable Infrastructure Capital, Inc (NYSE: HASI) at the closing market price of USD 28.61, as on March 11, 2025.
Data Powered by EOD Historical Data (“EODHD”).
Sector: Real Estate Industry: REIT - Specialty
| Company | Change (USD) | Price (USD) | Trailing PE (x) | Forward PE (x) | Price Sales TTM (x) | Price to Book Value (x) | Enterprise Value to Revenue (x) | |
|---|---|---|---|---|---|---|---|---|
| HASI Hannon Armstrong Sustainable Infrastructure Capital Inc |
0.09 0.37% | 24.38 | 76.50 | 11.43 | 25.49 | 1.49 | 20.78 | |
| AMT American Tower Corp |
-10.29 4.66% | 210.68 | 47.96 | 32.36 | 8.75 | 26.57 | 12.48 | 22.88 |
| EQIX Equinix Inc |
15.14 1.91% | 806.26 | 76.95 | 63.29 | 9.32 | 5.79 | 10.70 | 25.99 |
| CCI Crown Castle |
-3.19 3.06% | 101.18 | 35.66 | 36.36 | 6.63 | 8.37 | 11.19 | 19.03 |
| DLR Digital Realty Trust Inc |
3.35 2.25% | 152.24 | 46.75 | 98.04 | 7.73 | 2.30 | 10.89 | 19.17 |
Data Powered by EOD Historical Data (“EODHD”).
Related Risks: This report may be looked at from high-risk perspective and recommendations are provided are for a short duration. Recommendations provided in this report are solely based on technical parameters, and the fundamental performance of the stocks has not been considered in the decision-making process. Other factors which could impact the stock prices include market risks, regulatory risks, interest rates risks, currency risks, social and political instability risks etc.
Note 1: Past performance is not a reliable indicator of future performance.
Note 2: The reference date for all price data, currency, technical indicators, support, and resistance levels is March 11,2025. The reference data in this report has been partly sourced from REFINITIV.
Support: A level at which the stock prices tend to find support if they are falling, and a downtrend may take a pause backed by demand or buying interest. Support 1 refers to the nearby support level for the stock and if the price breaches the level, then Support 2 may act as the crucial support level for the stock.
Target: A level at which the stock prices tend to find resistance when they are rising, and an uptrend may take a pause due to profit booking or selling interest. Target 1 refers to the nearby resistance level for the stock and if the price surpasses the level, then Target 2 may act as the crucial resistance level for the stock.
Stop-loss: It is a level to protect further losses in case of unfavourable movement in the stock prices.
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