SolarEdge Technologies is in the early stages of making a strong recovery, according to Goldman Sachs. Analyst Brian Lee double upgraded the clean energy stock to buy from sell and increased its 12-month price target to $19 from $10, which suggests around 54% upside from Monday’s close. “We see the makings of a turnaround story that is one of the more idiosyncratic and out-of-consensus buy opportunities in our coverage,” Lee said in a note. “We anticipate 2025 to be a key inflection point and, while 1H25 may still be volatile, we view most concerns as already priced into the equity.” There’s a “disconnect” between fundamentals for solar equities and their valuation heading into next year as the market has overpriced risks associated with policies of the incoming Trump administration, Lee added. SolarEdge shares have been battered this year, losing more than 86% as the company struggles with sluggish residential solar demand and higher-for-longer interest rates. But the stock is up nearly 16% over the past month, jumping after the company announced in late November that it shuttered its energy storage division and plans to cut 500 jobs, or roughly 12% of its staff. Shares jumped more than 13.5% in premarket trading on the back of the upgrade. Lee thinks estimates on SolarEdge are bottoming as investors’ fears around the company’s debt levels “appear overblown” and create a relatively attractive risk-reward for the stock at current levels. He’s encouraged by SolarEdge’s restructuring efforts, including its recent headcount cut. “In our view, that could be poised to benefit from a “shrink-to-grow” strategy starting in 2025,” Lee said. Over the next few quarters, he added that better cost control and working capital management could further address fears around SolarEdge’s balance sheet, allowing the company to improve its product sales mix and reach positive earnings by the fourth quarter of next year. SEDG YTD mountain SolarEdge stock performance this year. Goldman’s bullish call comes as 24 of the 35 total analysts covering the name maintain a hold rating on the stock, according to LSEG.
