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On Monday, Truist Securities maintained a Hold rating for SolarEdge Technologies (NASDAQ:SEDG) with a consistent price target of $15.00. The firm's analyst noted the company's announcement of new safe harbor agreements, its second 45x tax credit sale, and another round of restructuring aimed at reducing expenses by $9 million to $11 million per quarter. Shares of SolarEdge surged approximately 19% during intraday trading following the news.
SolarEdge's recent agreements with Sunrun (NASDAQ:RUN) and an unnamed leading financier of residential solar installations signal strong confidence from key U.S. clients. These partnerships, which are set to continue deliveries into 2025, highlight the value of SolarEdge's domestic manufacturing capabilities. The analyst from Truist Securities pointed out that these developments, combined with the cost reduction efforts, could enhance the company's ability to generate free cash flow and work towards profitability.
Despite the positive developments in the U.S. market, the analyst expressed that the demand outlook for Europe through 2025 remains uncertain. The company's focus on incremental cost savings and the secured baseline demand in the U.S. due to the safe harbor agreements are seen as positive, but the volumes and amounts involved in these agreements have not been disclosed.
The announcement of the safe harbor agreements and the tax credit sale comes at a time when SolarEdge is actively working to improve its financial position. The expected quarterly expense reductions are part of the company's broader restructuring efforts.
In the wake of these announcements, SolarEdge's stock experienced a significant rise in value, although the long-term demand prospects in the European market continue to be an area of concern for analysts and investors alike.
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