The new year should bring a boost to clean energy stocks, according to Raymond James. Despite strong fundamentals, the sector faces a bleak 2022 – the worst since the global financial crisis, analyst Pavel Molchanov said in a note on Wednesday. The WilderHill Clean Energy Index lost 46% last year, he said. But Raymond James forecasts a 30% to 40% gain for the index this year. “The demand side of the equation is unequivocally not the cause of last year’s poor performance. Demand drivers vary around the world, but there is strength everywhere,” Molchanov wrote. For example, the Inflation Reduction Act provided “an enormous catalyst for the US energy transition,” he said. However, while supply chain conditions have improved, the risks have not gone away. Commodity prices and their impact on corporate margins are also still under the radar. “In any case, on a daily basis, these stocks tend to be traded, for lack of a better word, emotionally: high beta; driven by sentiment and momentum; and prone to unpredictable volatility, including sometimes for no apparent reason ,” said Molchanov. With that in mind, he upgraded two clean energy companies: Chart Industries for a strong buy from the market, and Maxeon Solar Technologies for outperforming the market. Molchanov said the call at Chart Industries, which provides liquefied natural gas technology, services and equipment, was an “opportunistic upgrade.” The stock peaked in early November, but then lost half its value in “just days” after the company announced it would acquire Howden, a provider of air and gas handling solutions. The deal carries enormous balance sheet risks and integration uncertainty, Molchanov said. Therefore, this idea is for people with a high risk tolerance, he said. “To be clear, we don’t predict that the stock will return to its pre-Howden high anytime soon. But we have a view that the worst is in the rearview mirror. The financing package – a combination of secured and unsecured debt. , and preferred and common equity – is locked , so we no longer have to think about what the cost of capital is,” writes Molchanov. The $160 price target represents a 39% upside from Tuesday’s close. Chart Industries joins names such as Bloom Energy and FTC Solar on Raymond James’ strong buy list. The company is also bullish on Maxeon Solar. Stocks got a bounce from the Inflation Reduction Act but are down nearly 40% from their 52-week high in September, Molchanov said. “As a result of this recent weakness, the stock is no longer priced in the long-term earnings upside of its yet-to-be-explained plans to build its U.S. manufacturing footprint,” he said. The start of US manufacturing will likely be the 2025 story, he said. However, the company’s basic business – manufacturing in Mexico, Malaysia and the Philippines – is attractively valued, said Molchanov. “While we await details on the US manufacturing roadmap — scale, location, timing, and funding sources — this should be considered the ‘icing on the cake,'” he wrote. The $22 price target represents a 44% upside from Tuesday’s close. The company also upgraded NextEra Energy to market perform from underperform, but noted lack of enthusiasm about the stock at that level. However, the call about the yield, the Federal Reserve ‘s apparent conclusion of the most aggressive part of the interest rate hikes and more comfort level market with a stable rate environment, he said. – CNBC’s Michael Bloom contributed reporting.