Mizuho cuts ratings on Fluence, Nextracker, Shoals, Enlight after energy bill

Investing.com -- Mizuho (NYSE:MFG) Securities downgraded several clean energy companies in response to President Trump’s One Big Beautiful Bill (OBBB), which reshapes the federal energy subsidy landscape, in a note dated Monday. 

The brokerage lowered ratings on Fluence Energy, Nextracker, and Shoals Technologies to “neutral,” and cut Enlight Renewable Energy to “underperform.”

The new policy accelerates the expiration of solar and wind tax credits by 2030. To qualify for full benefits, projects must begin construction within the next year. 

By the end of 2025, projects will also need to avoid the use of Chinese-linked materials to remain eligible. 

Mizuho analysts expect these conditions to limit short-term demand, particularly for utility-scale solar developers, which face interconnection delays and stricter regulatory compliance.

Nextracker’s price target was reduced by 3% to $65, while Shoals Technologies’ target was left unchanged due to rounding. 

Despite raising Fluence Energy’s price target by 67% to $10, Mizuho moved the stock to Neutral, citing that the value of its domestic supply chain is now priced in. The report also noted an expected rise in domestic competition within one to two years.

Enlight Renewable Energy’s price target was increased 11% to $21 following a recent stock rally. 

However, the brokerage downgraded the company to Underperform, citing limited visibility in pulling forward project development beyond 2028.

Mizuho’s updated stance favors domestic manufacturers and residential solar leasing firms over utility developers and system component providers. 

The OBBB maintains the 45X manufacturing tax credit established under the Inflation Reduction Act while tightening content requirements to exclude materials linked to China. 

As a result, Mizuho named First Solar (NASDAQ:FSLR), Bloom Energy (NYSE:BE), and Sunrun (NASDAQ:RUN) as its top picks under the new policy environment.

First Solar’s price target was raised by 1% to $278, and Bloom Energy’s by 19% to $31. 

Sunrun’s target was increased 62% to $21, with analysts expecting the market to shift fully to solar leases, which remain eligible for the Investment Tax Credit through 2030. In contrast, the 25D credit for cash and loan purchases ends on December 31, 2025.

Among inverter manufacturers, SolarEdge’s price target was raised 61% to $29, though its Neutral rating was maintained. 

Enphase Energy’s target was reduced 6% to $50 due to anticipated declines in solar loan demand, but Mizuho kept an “outperform” rating based on expected cost savings from the company’s IQ9 platform.

The report also cited stable support for battery energy storage systems under the OBBB, with continued tax credits and stricter foreign content thresholds. 

Fuel cells received an unexpected boost, with the reinstatement of a 30% tax credit for natural gas-based systems enhancing Bloom Energy’s competitiveness.