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Investing.com - Seaport Global Securities downgraded Fluence Energy Inc. (NASDAQ:FLNC) from Buy to Neutral on Wednesday, citing the stock’s 183% rebound since April. The stock’s recent surge of over 23% in just the past week, combined with technical indicators from InvestingPro suggesting overbought conditions, appears to support this cautious stance.
The research firm believes Fluence Energy stock has reached a fair valuation following its significant recovery during a period described as "clean tech’s cruelest month for sentiment/policy threats." This assessment aligns with InvestingPro’s Fair Value analysis, though the stock has shown significant volatility with a -25.75% return over the past six months.
Seaport Global noted that while energy storage has emerged as a winner from the GOP’s reconciliation revamp of the IRA, solar has been negatively impacted by the OBBBA’s restrictions on ITC (NSE:ITC) eligibility, which could lead solar developers to proceed more cautiously than bullish scenarios assume.
The firm expressed three company-specific concerns about Fluence, including expectations that margins will remain under pressure due to competitive dynamics and a downtrend in the company’s Services attachment rate. These concerns are reflected in the company’s weak gross profit margin of 13.07% and negative earnings of -$0.19 per share over the last twelve months. For deeper insights into Fluence’s financial health and 15+ additional exclusive ProTips, visit InvestingPro.
Seaport Global also raised questions about Fluence’s plan to ensure its secured cell manufacturing capacity at AESC’s Tennessee factory will meet the OBBBA’s post-2025 FEOC requirements.
In other recent news, Fluence Energy has been selected by AMPYR Australia for a significant battery energy storage project, the 600MWh Wellington Stage 1. Additionally, the company announced that two more battery energy storage systems in Australia are set to commence operations in the coming months. Fluence Energy has also initiated production at a new facility in Goodyear, Arizona, focusing on enclosures and battery management systems for grid-scale energy storage. This facility is part of a broader strategy to enhance domestic production and energy security, involving a $700 million investment and creating over 1,200 manufacturing jobs.
In terms of analyst activity, Jefferies raised its price target for Fluence Energy to $6, citing ongoing competition from Chinese suppliers despite favorable policy outcomes. Morgan Stanley (NYSE:MS) also adjusted its price target upward to $5, acknowledging uncertainties in U.S. bookings but expressing cautious optimism about future tariff improvements. These developments reflect evolving market conditions and strategic positioning by the company.
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