Goldman Sachs analyst Brian Lee revised rankings for key residential photo voltaic shares. The analyst notes there’s a disconnect between the mid-to-long-term fundamentals and valuations for photo voltaic/storage equities heading into 2025.
Photo voltaic equities look like overpricing dangers tied to coverage uncertainty, although secular progress drivers, corresponding to U.S. energy demand and pricing, stay robust.
SEDG: The analyst upgraded SolarEdge Applied sciences, Inc. (NASDAQ:SEDG) score to Purchase from Promote and raised the worth goal to $19 (from $10 prior).
After a difficult interval, together with a tricky U.S. residential photo voltaic market and weaker European demand, the analyst notes estimates have bottomed, and considerations about SEDG’s $350 million debt in 2025 are overstated.
SEDG’s current cost-cutting measures, together with headcount and facility reductions, strengthen the outlook, provides the analyst.
Lee says that whereas the decision could also be early, he sees a turnaround as the corporate advantages from improved price management and a greater product combine.
The analyst sees FY25 as a key inflection level, with progress possible accelerating in FY26.
The analyst estimates unfavourable EPS for FY25 however expects a constructive fourth-quarter FY25 and powerful progress in FY26. The EPS estimate of $1.64 for FY26 is effectively above the consensus of $0.55, provides the analyst.
CSIQ: In the meantime, Lee downgraded Canadian Photo voltaic Inc. (NASDAQ:CSIQ) to Promote from Impartial and lower the worth goal to $11 (from $14 prior).
The analyst’s unfavourable outlook stems from coverage dangers below the Trump administration and tariffs on photo voltaic imports from Southeast Asia.
As a significant international provider of photo voltaic panels to the U.S., CSIQ is extremely uncovered to those dangers, which can impression its margins, particularly given the U.S. has been one of many extra worthwhile markets lately, says the analyst.
The analyst additionally sees consensus estimates as overly optimistic, with the 2025-2026 EBITDA projections 35% – 40% beneath the Avenue’s, as current coverage adjustments and the unsure outlook are usually not absolutely mirrored in market expectations.
The analyst says 2024-2025 EBITDA estimates stay largely unchanged, whereas the 2026 estimate is revised down by 6% to $688 million attributable to a bleak outlook.
Value Motion: SEDG shares are up 23.3% at $15.19, whereas CSIQ shares are up 0.86% at $11.76 on the final examine Tuesday.
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Date |
Agency |
Motion |
From |
To |
|---|---|---|---|---|
|
Dec 2021 |
Citigroup |
Maintains |
Purchase |
|
|
Nov 2021 |
Wells Fargo |
Initiates Protection On |
Equal-Weight |
|
|
Aug 2021 |
GLJ Analysis |
Downgrades |
Purchase |
Promote |
View Extra Analyst Scores for CSIQ
