Why Bank of America Is Bullish On This Green Tech Company

Bank of America analysts remain bullish on shares of Solaredge Technologies Inc SEDG ahead of the company's Aug. 2 earnings report.

SolarEdge Analyst: Aric Li reiterated the firm's Buy rating for SolarEdge Technologies, moving the price target from $276 to $279.

The SolarEdge Takeaways: The current semiconductor demand surge has hampered SolarEdge's production capabilities as indicated by talks with the company's installers and distributors, said Li in a Monday note.

As supply constraints ease, SolarEdge has the capability to ramp up production to service all its product lines quickly, said the analyst.

SolarEdge is also introducing higher capacity products to target clients with greater power needs, he said.

Taking current supply shortages into account, Li has dropped expectations for 2021 and 2022 revenue and EPS forecasts for 2021-2023, according to the report.

Despite implementing more conservative forecasts than consensus, SolarEdge presents a solid value-driven play, trading at an 8-8.5% discount rate via DCF analysis, said Li. Additionally, SolarEdge trades a 4.0x lower multiple on expected 2023 EV/EBITDA to peers, despite being competitive across various product lines, said the analyst.

The company has also been a consistent free-cash-flow generator, something not commonly seen with green tech companies, said Li.

SEDG Price Action: SolarEdge was up 1.52% to $240.17 at last check Monday