The new year should bring a boost to clean energy stocks, according to Raymond James. Despite solid underlying fundamentals, the sector had a dismal 2022 — the worst since the global financial crisis, analyst Pavel Molchanov said in a note Wednesday. The WilderHill Clean Energy Index lost 46% last year, he pointed out. Yet Raymond James is forecasting a 30% to 40% gain for the index this year. “The demand side of the equation is emphatically not a culprit for the past year’s underperformance. Demand drivers vary around the world, but there is strength everywhere,” Molchanov wrote. For instance, the Inflation Reduction Act is providing a “wide-ranging catalyst for U.S. energy transition,” he said. However, while supply chain conditions are improving, the risk is not over. Commodity prices and their impact on company margins are also still on the radar. “In any case, on a day-to-day basis, these stocks tend to trade, for lack of a better word, emotionally: they are high-beta; driven by sentiment and momentum; and prone to relentless volatility, including sometimes for no apparent reason,” Molchanov said. With that in mind, he upgraded two clean energy companies: Chart Industries to strong buy from market perform, and Maxeon Solar Technologies to outperform from market perform. Molchanov said his call on Chart Industries, which provides liquefied natural gas technology, services and equipment, was an “opportunistic upgrade.” The stock was at all-time highs in early November, but then lost half its value in “mere days” after the company announced it would acquire privately-held Howden, a provider of air and gas handling solutions. The deal carries an outsized balance sheet risk and integration uncertainty, Molchanov noted. Therefore, this idea is for those who have a high degree of risk tolerance, he said. “To be clear, we are not predicting that the stock will get back to its pre-Howden highs anytime soon. But we are of the 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 in, so we no longer have to ponder what the cost of capital will be,” Molchanov wrote. His $160 price target implies 39% upside from Tuesday’s close. Chart Industries joins names such as Bloom Energy and FTC Solar on Raymond James’ strong-buy list. The firm is also bullish on Maxeon Solar. The stock got a bounce from the Inflation Reduction Act but is down nearly 40% from its 52-week high in September, Molchanov said. “A result of this recent weakness, the stock is no longer pricing in the longer-term uplift in profitability from the yet-to-be-clarified plan to establish a U.S. manufacturing footprint,” he said. The startup of U.S. manufacturing is likely to be a 2025 story, he pointed out. However, the company’s base business — manufacturing in Mexico, Malaysia and the Philippines — is attractively valued, Molchanov said. “As we wait for details on the U.S. manufacturing roadmap — scale, location, timing, and source of funding — this should be regarded as ‘icing on the cake,'” he wrote. His $22 price target implies 44% upside from Tuesday’s close. The firm also upgraded NextEra Energy to market perform from underperform, but noted it is not enthusiastic about the stock at these levels. Instead, the call is about yields, the Federal Reserve ‘s apparent conclusion of its most aggressive portion of interest rate hikes and the market’s greater comfort level with the stabilizing rate environment, he said. — CNBC’s Michael Bloom contributed reporting.