Sequans Communications reports second quarter revenue flat at $8.1 million
On Thursday, BMO Capital Markets maintained a Market Perform rating for Fluence Energy Inc. (NASDAQ:FLNC), with a steady price target of $10.00. The firm’s analysis suggests that Fluence Energy may face significant challenges due to its reliance on imported Chinese battery packs and cells, which are key components in the company’s storage systems. According to InvestingPro data, the stock has seen significant pressure, trading near its 52-week low of $4.61, despite generating $2.52 billion in revenue with 11% year-over-year growth. Analysis suggests the stock is currently undervalued based on Fair Value metrics.
According to BMO Capital’s assessment, battery packs and cells constitute approximately 45% to 55% of the cost of goods sold (COGS) for Fluence Energy’s storage systems. Historically, 85% of these battery imports have come from China’s Contemporary Amperex Technology Co. Limited (CATL), which has been known to absorb around half of the tariff changes. The analyst noted that reciprocal tariffs on China have added an extra 34% to the initial 20% tariffs imposed during the Trump administration, alongside a pre-existing general tariff rate of 13%. These tariff pressures have contributed to the company’s weak gross profit margin of 12.93%, as revealed by InvestingPro analysis.
The financial burden on Fluence Energy is expected to increase as Section 301 tariffs are slated to rise from the current 7.5% to 25% on January 1, 2026. Additionally, there is an ongoing anti-dumping/countervailing duty (AD/CVD) case concerning graphite anodes, which could further impact the company’s cost structure.
Sales in the United States account for roughly 50% of Fluence Energy’s revenue, indicating that the company’s financial performance is significantly tied to the American market. The analyst’s reiteration of the Market Perform rating and price target reflects these concerns about the potential financial impact of tariffs on the company’s profitability and operations.
In other recent news, Fluence Energy has made a notable organizational change by promoting Peter Williams to Senior Vice President and Chief Product and Supply Chain Officer. This move aims to streamline product development and supply chain processes. In the realm of analyst opinions, Mizuho (NYSE:MFG) has initiated coverage on Fluence Energy with an Outperform rating and a price target of $8.00, citing the company’s strong market position and potential for sales growth. Meanwhile, BofA Securities has downgraded Fluence Energy from Buy to Neutral, reducing the price target to $8.00 due to concerns over operational execution and competition. Truist Securities, however, maintains a Buy rating on Fluence Energy with a steady price target of $7.00, noting a significant agreement with Cordelio Power for over 1.0GWh of battery energy storage equipment. The agreement is expected to support Cordelio’s projects set for 2026 and 2027. Additionally, Citi has revised Canadian Solar (NASDAQ:CSIQ)’s price target to $10.00, maintaining a Sell rating after the company’s earnings report revealed margin challenges. The report also highlighted potential negative implications for Fluence Energy due to pricing pressures in the energy storage sector. These developments indicate a dynamic environment for Fluence Energy amid industry challenges and opportunities.
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