BofA Expects Alt-Energy Correction in Q2; Downgrades Solar, Upgrades Wind (TAN) (FAN)

Analysts at BofA/Merrill Lynch revised ratings on a number of industries within the Alternative Energy sector on Thursday.

The firm sees a near-term correction in the group amid recent outperformance: alt-energy stocks were up 15% during Q1, compared to a 5% rise in the major averages.

• Solar - sector rating downgraded from Equal Weight to Underweight
  
• Wind - upgraded from Underweight to Equal Weight
  
• Smart Grid - downgraded from Overweight to Equal Weight
  
• Geothermal - upgraded from Underweight to Overweight
  
• Storage - upgraded from Equal Weight to Overweight
  
• Fuels - maintained at Underweight
  
• Water - maintained at Overweight
  
• Waste - maintained at Equal Weight

BofA offered several of its favorite buys to go along with the new sector ratings: First Solar (Nasdaq: FSLR), Trina Solar (NYSE: TSL) and Ameresco (NYSE: AMRC). On the bear side, the firm said its expected Underperformers are centered on wind and European solar stocks.

The Claymore/MAC Global Solar ETF (NYSE: TAN) is down 1.9 percent Thursday, while the First Trust Global Wind Energy ETF (NYSE: FAN) is down 1.6 percent.

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