EU and US could reach trade deal this weekend - Reuters
Wednesday, Canaccord Genuity analyst Austin Moeller updated the firm’s stance on SolarEdge Technologies (NASDAQ:SEDG), increasing the price target to $16.50 from the previous $14.00. The Hold rating on the company’s stock remains unchanged. Currently trading at $14.37, InvestingPro analysis suggests the stock is slightly undervalued. Moeller’s decision to adjust the price target comes after considering the impact of tariffs and market share dynamics, with analyst targets ranging from $5 to $27.
The analyst noted that while the financial year 2025 free cash flow (FCF) guidance for SolarEdge was reduced due to the influence of tariffs, there is a potential for the 145% tariffs imposed on China to be renegotiated or postponed, given the current dynamic environment. InvestingPro data reveals concerning trends, including rapid cash burn and weak gross profit margins of -87.14%. This possibility could mitigate some of the negative effects on SolarEdge’s financial outlook, though 11 analysts have recently revised their earnings expectations downward.
Furthermore, Moeller highlighted positive signals from point-of-sale (POS) systems of distributors in Europe. These indications suggest that SolarEdge is gaining market share over Chinese inverters. The analyst expects confirmation of this trend within the next one or two months. This market share gain could provide SolarEdge with the leverage to increase prices in response to customer demand.
The Hold rating suggests that Canaccord Genuity advises investors to maintain their current position in SolarEdge stock, without advocating for additional purchases or sales at this time. The new price target of $16.50 reflects the analyst’s revised expectations for the stock’s future performance, taking into account the latest developments and forecasts. Despite the stock’s significant decline of over 75% in the past year, it has shown recent momentum with a 17.45% gain in the past week. For deeper insights into SolarEdge’s financial health and future prospects, investors can access comprehensive analysis through InvestingPro’s detailed research reports, which cover over 1,400 US stocks.
Moeller’s comments provide insight into the factors influencing SolarEdge’s valuation, including international trade policies and competitive positioning within the industry. The company’s ability to navigate the tariff landscape and capitalize on its strengths in the European market will be key to its financial performance moving forward.
In other recent news, SolarEdge Technologies has introduced a solar-powered electric vehicle (EV) charging system aimed at businesses, promising significant energy cost savings. The system, known as the SolarEdge ONE EV Charger, is designed to optimize energy usage by prioritizing solar power and is expected to be available for residential use by late 2025. BMO Capital Markets recently maintained an Underperform rating on SolarEdge, setting a price target of $14.00, citing a challenging period ahead for the company’s stock levels and a downgrade in free cash flow expectations. Meanwhile, Northland upgraded SolarEdge from Underperform to Market Perform, although the price target was reduced to $12.50 due to recent share declines. Morgan Stanley (NYSE:MS) downgraded the stock to Underweight, with a new price target of $10, reflecting concerns over declining demand and tariff impacts. Jefferies also cut its price target for SolarEdge to $9.00, maintaining an Underperform rating due to ongoing tariff concerns affecting gross margins. These developments highlight the various challenges and strategic moves SolarEdge is navigating in the current market environment.
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