The SolarEdge Technologies Story 'Looks Better Than We Thought' Says Analyst

SolarEdge Technologies Inc SEDG is in the spotlight as the U.S. increases pressure on Chinese companies moving products through other countries in Asia.

The company is poised to generate gross and operating margin expansion, according to BofA Securities.

The SolarEdge Technologies Analyst: Julien Dumoulin-Smith upgraded the rating for SolarEdge Technologies from Neutral to Buy while raising the price target from $269 to $367.

The SolarEdge Technologies Thesis: The company’s latest guidance of recovery is better than what is “appreciated by the Street,” Dumoulin-Smith said in the upgrade note.

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“SEDG has latitude to raise pricing across end markets. Better yet, these price increases will flow through to microinverters, optimizers and storage,” the analyst wrote.

“As SEDG ramps storage deployments, we have visibility to 5x higher ticket prices with identical opex,” Dumoulin-Smith mentioned. “Our conversations suggest C&I sales afford richer operating margins, as well, despite lower GM."

SolarEdge Technologies believed “it has line of sight to 20-22% operating margins in core solar exiting 2023,” which represented an improvement that “is far better than understood by the Street,” the analyst further said.

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SEDG Price Action: Shares of SolarEdge Technologies had risen by 4.68% to $312.96 Wednesday at publication.

Photo: Sergey Nivens via Shutterstock