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On Tuesday, UBS analyst Jon Windham increased the price target for SolarEdge Technologies (NASDAQ:SEDG) shares to $20.00, up from the previous target of $17.00, while maintaining a Neutral rating on the stock. According to InvestingPro data, analyst targets for SEDG currently range from $5 to $27, with the stock showing significant volatility over the past year, having declined over 60% despite a recent 33% surge in the past six months. Windham’s assessment centers on the potential impact of the elimination of the U.S. residential tax credit on the rooftop solar market. He believes that without this tax credit, fewer homeowners would find it financially beneficial to install rooftop solar systems.
Windham referenced a note from October 17, 2023, which includes an interactive model of the U.S. residential solar and storage market. This model suggests that in 2024, SolarEdge held an 18% share of the California commercial and industrial (C&I) inverter market, while Chinese competitors Chint and Sungrow combined commanded a 37% share.
The analyst pointed out that customer concerns over the Forced Equipment Outage Cost (FEOC) present an opportunity for SolarEdge to potentially increase their volumes and pricing. However, he also warned that the current language of the policy could potentially lessen demand for any U.S. hardware, which includes products like those offered by SolarEdge. For deeper insights into SEDG’s market position and comprehensive analysis, investors can access detailed financial health scores and 12+ additional ProTips through InvestingPro.
SolarEdge Technologies, a company specializing in inverter solutions for solar energy systems, faces a shifting landscape in the U.S. solar market. The analyst’s comments reflect the delicate balance between market opportunities and regulatory changes that could influence the company’s performance.
The increase in the price target to $20.00 reflects a modestly more optimistic view of SolarEdge’s potential to navigate market dynamics, despite the concerns about policy changes and their effects on demand for U.S. solar hardware. Based on InvestingPro’s Fair Value analysis, the stock appears to be trading near its fair value, with analysts not anticipating profitability this year.
In other recent news, SolarEdge Technologies has been the focus of several developments that may interest investors. The company recently held its annual shareholder meeting, where key matters such as the election of directors and the ratification of auditors were addressed. Notably, a proposal to amend the company’s Restated Certificate of Incorporation did not pass despite receiving significant support. Meanwhile, Bank of America analysts have revised their estimates for SolarEdge, citing increased policy risks and a projected decline in U.S. volumes for 2026. This reflects broader concerns about the solar industry’s growth in light of evolving policy landscapes.
Additionally, GLJ Research upgraded SolarEdge’s stock rating from Sell to Hold, influenced by potential legislative support for solar energy tax credits. Northland also upgraded the company’s stock to Market Perform, emphasizing SolarEdge’s strategic position as a non-Chinese supplier with strong cybersecurity capabilities. However, Guggenheim analysts expressed concerns about the impact of legislative changes on residential solar companies like SolarEdge, due to adjustments in financing models. These recent developments present a complex picture for investors considering SolarEdge Technologies.
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