S&P 500 may face selling pressure as systematic funds reach full exposure
On Thursday, BofA Securities analysts adjusted their stance on Fluence Energy Inc. (NASDAQ:FLNC), downgrading the stock from Buy to Neutral. The firm also significantly reduced the price target from $20.00 to $8.00. The stock, currently trading near its 52-week low of $6.35, has declined over 68% in the past year. The revision comes amid concerns over Fluence Energy’s operational execution and an increasingly competitive landscape. According to InvestingPro analysis, the stock appears undervalued based on its Fair Value metrics.
The analysts cited execution risks and growing competition as primary reasons for the downgrade, which has dampened their confidence in the company’s revenue projections. They highlighted a 15% reduction in Fiscal Year 2025 revenue guidance and a shift towards a heavier reliance on second-half revenues, which they believe increases the likelihood of negative revisions and potential earnings misses. This situation is reminiscent of the challenges faced in Fiscal Year 2024. InvestingPro data reveals that five analysts have recently revised their earnings downward, though revenue is still expected to grow by 22% this fiscal year.
Tesla (NASDAQ:TSLA)’s rise in market share within the United States and the expansion of Chinese competitors internationally with cost-effective products were noted as contributing factors to the competitive pressure on Fluence Energy. The analysts expressed that in order for them to adopt a more positive outlook on Fluence Energy’s stock, they would need to see stronger evidence of the company’s ability to maintain its market share, enhance profit margins through new products, and successfully navigate regulatory uncertainties. InvestingPro subscribers have access to over 20 additional insights about FLNC, including detailed margin analysis and competitive positioning metrics.
The report reflects BofA Securities’ revised expectations for Fluence Energy’s financial performance and market position. The company, known for its energy storage solutions, maintains a solid balance sheet with more cash than debt and a current ratio of 1.57, though it faces a more challenging environment as it contends with both domestic and international competitors in the energy sector.
In other recent news, Fluence Energy has been the subject of several analyst notes. Truist Securities maintained a Buy rating on Fluence Energy, highlighting the company’s agreement with Cordelio Power for more than 1.0GWh of Battery Energy Storage System (BESS) equipment. Meanwhile, Canaccord Genuity reduced its price target for Fluence Energy to $14.00 from $34.00, following the company’s announcement of lowered financial guidance for fiscal year 2025.
Jefferies also adjusted Fluence Energy’s price target to $7.00 from $15.00, citing concerns about the competitive landscape and the company’s ability to meet its growth targets. Goldman Sachs revised the price target for Fluence Energy to $13.00 from $26.00, despite a disappointing first quarter and a reduction in the company’s full-year guidance metrics.
Lastly, UBS downgraded Fluence Energy’s stock from Buy to Neutral and reduced the price target to $8.00 from $28.00 due to concerns about potential further profit reductions. These developments are part of a series of recent events surrounding Fluence Energy, indicating a mixed outlook from different analyst firms.
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