BofA update shows where active managers are putting money
Investing.com - BofA Securities downgraded Solaria Energia y Medio Ambiente SA (BME:SLR) from Buy to Neutral while raising its price target to EUR15.00 from EUR9.50.
The downgrade comes despite the higher price target, as BofA Securities analyst Alexandre Roncier noted the stock’s valuation "has now well recovered and assumes execution, ramp-up, asset rotations, and/or from datacentres upside - most of which remains to be seen."
BofA Securities expressed concerns that Solaria’s management was addressing too many new verticals simultaneously while making limited progress on core solar activities, describing the current investment case as having a "quasi-binary outcome at current levels."
The firm’s EUR15 price objective implies a 10x two-year forward EV/EBITDA multiple, excluding gains and datacentres, compared to EDPR at 11x and other clean energy transition companies trading at approximately 8x.
Management is expected to provide an update on datacentre operations in September, following a year-long delay and a previously announced deal that fell through, though BofA Securities believes the shares already price in EUR600 million in upside from this segment.
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