Undervalued Utilities Stocks with Strong Momentum Potential for Short-Term Gains: A Technical and Earnings-Driven Analysis of AXIA Energia and ReNew Energy Global

The utilities sector, long seen as a defensive play, is undergoing a quiet transformation in 2025. As global energy markets stabilize and clean energy demand accelerates, undervalued utilities stocks are emerging as compelling opportunities for short-term gains. Two names standing out are AXIA Energia SA (AXIA) and Renew Energy Global PLC (RNW), which combine strong earnings momentum with technical indicators suggesting potential rebounds. This analysis delves into their fundamentals, strategic moves, and market positioning to justify their inclusion in a tactical, high-reward portfolio.

AXIA Energia SA: A Volatile Yet Resilient Growth Story

AXIA Energia SA, a Brazilian power giant, has exhibited a mix of volatility and resilience in 2025. As of December 24, 2025, its shares closed at $9.04, reflecting a modest 0.52% intraday gain but a 3.91% decline over the past 30 days. However, the stock's 1-year price action tells a different story: a staggering 99.89% increase, underscoring its long-term growth trajectory.

Technical indicators paint a nuanced picture. While AXIA's 14-day RSI fluctuates between 50.20 (neutral) and 72.111 (overbought), the latter suggests potential for a rebound. Weekly price swings averaging 4.5% highlight its volatility but also its responsiveness to market sentiment as reported by Reuters. This volatility is partly attributable to a strategic share reorganization in 2025, which included the creation of preferred shares and redemption of PNR shares. Though the move triggered a sharp intraday price drop-the steepest since 2020-it was framed as a necessary step to preserve financial flexibility.

Earnings momentum further strengthens the case. AXIA reported Q2 2025 revenue of 10.20 billion Brazilian reais, a 21.48% year-over-year increase. Analysts project 2025–2027 earnings growth of 147.33%, driven by aggressive investments in Brazil's power-sector auctions and battery storage initiatives. With Q2 2026 results scheduled for August 5, 2026, the company's strategic clarity and capital allocation discipline position it as a high-conviction play according to technical analysis.

Renew Energy Global PLC: Oversold but Earnings-Driven

Renew Energy Global PLC (RNW) presents a contrasting but equally compelling case. As of Q4 2025, its RSI stands at 40.65, indicating a neutral stance, while its 14-day RSI dipped to 24.63-clearly oversold territory. The stock's current price of $5.50, however, contrasts sharply with a 1-month price target of $3.73, signaling a bearish technical outlook. This divergence between fundamentals and technicals is a key opportunity for contrarian investors.

Earnings performance tells a story of robust growth. Q4 FY2025 net profit surged 413% year-over-year to INR 3,137 million ($37 million), driven by a 40% revenue increase and a 12.4% rise in operating capacity to 10.7 GW. For the full fiscal year, FY2025 net profit reached INR 4,591 million, with guidance for FY2026 adjusted EBITDA projected at INR 87–93 billion. These figures underscore RNW's operational strength, even as its stock price languishes.

Strategic partnerships also bolster its case. A 150 MW solar project with Google in Rajasthan highlights its ESG-aligned growth strategy. Meanwhile, a $8.15-per-share acquisition offer from a consortium including Masdar and CPP Investments has sparked debate, with long-term shareholders arguing the price undervalues its clean energy assets. This tension between market sentiment and intrinsic value creates a compelling entry point for investors.

The Investment Case: Momentum in Oversold Utilities

Both AXIA and RNW exemplify the utilities sector's duality: technical indicators suggest oversold conditions, while earnings and strategic momentum point to undervaluation. For AXIA, the combination of a 1-year price surge and strategic reorganization positions it as a high-volatility, high-reward play. For RNW, the disconnect between bearish technicals and robust earnings growth offers a contrarian opportunity.

In a stabilizing sector, these stocks represent tactical bets on near-term rebounds. AXIA's aggressive investments in Brazil's power auctions and RNW's ESG-driven partnerships align with global energy trends, making them well-positioned to capitalize on 2026's momentum. While risks remain-particularly for RNW's technical bearishness-the potential for short-term gains is significant.