Fed Governor Adriana Kugler to resign
On Monday, HSBC analysts downgraded Fluence Energy Inc. (NASDAQ:FLNC) from a Buy to a Hold, significantly reducing the price target to $4.00 from the previous $15.00. According to InvestingPro data, analyst targets for FLNC now range from $2.00 to $30.00, with the company’s next earnings report due on May 7, 2025. The decision comes in response to the Trump Administration’s recent actions to double tariffs on Chinese imports, which has sent ripples through the US energy storage market.
The tariffs, which have been set at 145% on Chinese battery cell imports, are expected to drive up system costs by over 50%, according to Woodmac’s report. This could render many energy storage projects financially unfeasible. Chinese battery cells are crucial to the US market, supplying approximately 70% of its demand, while domestic US cell manufacturing accounts for only about 6%. The impact is particularly concerning for Fluence, which maintains a current ratio of 1.57 but shows weak gross profit margins of approximately 13%.
The impact of the tariffs has been immediately felt in the industry. On April 25, during its Q1 2025 earnings call, Wärtsilä, a company operating in the same sector as Fluence Energy, reported a staggering 87% year-over-year decline in order intake for its Energy Storage & Optimisation division. The company attributed the decline to a combination of order lumpiness, postponed decision-making, and a stagnant US market. Furthermore, Wärtsilä experienced a substantial order cancellation worth $65 million directly tied to the new tariffs.
The CEO of Wärtsilä highlighted that the US energy storage market has come to a halt and anticipates demand will remain stagnant for one to two quarters. This bleak outlook has influenced HSBC’s downgrade decision, as the market conditions pose significant risks for companies like Fluence Energy operating within this sector.
Fluence Energy’s downgrade by HSBC reflects the broader concerns over trade policies and their impact on the energy storage industry. With the market at a standstill and future demand uncertain, the company’s near-term prospects appear to be challenging amid the current tariff environment. The stock has declined over 75% in the past year, though InvestingPro’s Fair Value analysis suggests the stock may be undervalued at current levels. For detailed insights into Fluence Energy’s financial health and growth prospects, access the comprehensive Pro Research Report, available exclusively to InvestingPro subscribers.
In other recent news, several analysts have adjusted their outlooks on Fluence Energy, reflecting various challenges the company faces. Piper Sandler revised the price target for Fluence Energy to $4, citing concerns over tariffs and global pricing pressures, while maintaining a Neutral rating. Canaccord Genuity also lowered its price target to $10 but kept a Buy rating, noting delays and competition as key issues, yet expressing optimism about the company’s cash flow and growth potential. Guggenheim Securities cut its price target to $2 and reiterated a Sell rating, pointing to Fluence’s reliance on government subsidies for its EBITDA projections. JPMorgan downgraded Fluence Energy’s stock to Neutral, reducing the price target to $7, due to uncertainties around tariffs affecting order activity. Barclays (LON:BARC) also downgraded the stock to Equalweight and slashed the price target to $5, highlighting competitive pressures and regulatory uncertainties as factors impacting the company’s outlook. These recent developments indicate a cautious sentiment among analysts regarding Fluence Energy’s near-term performance amidst a challenging market environment.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.