The near-term tax equity overhangs on Bloom Energy Corp’s BE shares are likely to ease, according to BofA Securities.
The Bloom Energy Analyst: Julien Dumoulin-Smith upgraded the rating for Bloom Energy from Underperform to Neutral, while raising the price target from $19.50 to $25.
The Bloom Energy Thesis: Management seems confident about the tax equity issue being eventually resolved, despite delays around availability, Dumoulin-Smith said in the upgrade note.
“Alongside confidence in its backlog execution, resiliency focus of customers, potential for direct-pay in federal bill, and sales backdrop with 95% availability that appears to assuage buyer concerns, we see a less cautious backdrop,” the analyst wrote.
“Shares remain pricey vs. peers, but we expect an improving backdrop into what is likely a more constructive 2Q update from 1Q,” he added.
“Beyond TE, we perceive greater mgmt. confidence around clearing near-term hurdles and executing on FY targets including volumetric deployments and revenue (with financing secured), Services biz profitability inflection, YE21 backlog growth, and Gen 7.5 roll-out into year-end,” Dumoulin-Smith said.
The analyst expects developments ahead will “largely mitigate near-term negative rerating catalysts.”
BE Price Action: Shares of Bloom Energy are up 2.03% to $25.16 Thursday morning.
(Photo: Bloom Energy)
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