SolarEdge is facing several challenges right now and that could mean a good opportunity for investors, according to Northland Capital Markets. The firm upgraded the Israeli solar stock on Friday to buy from hold and established a price target of $147, which implies about 18% upside from its closing price Thursday. ” Solar demand is weak, Israel is at war, an inventory correction, a strong dollar is a headwind, and a competitor pre-announced. It is hard to imagine things could get much worse,” Gus Richard, an analyst at Northland Capital Markets, said in a note Friday. “[The] stock is down 50% since it reported Q2 on 8/1, likely reflecting the short-term outlook. Energy shocks and extreme weather events drive consumers’ need for self-sufficiency.” SEDG YTD mountain Northland sees about 18% upside in SEDG from current levels. SolarEdge supplies panel-level electronics, inverters, and storage systems and Northland says it’s set up for success with self-generation of electricity becoming increasingly important as extreme weather events continue to knock out power and with fossil fuel supply disruptions. The note also highlighted that although SolarEdge is based in Israel and will probably see an impact from the new war in the region, the company works with two contract manufacturers with a global footprint in Asia and North America. Richard noted that his estimates for SolarEdge are below consensus. He expects fourth-quarter revenue to fall 9% on a quarterly basis and flat revenue – after it delivered a 19% quarterly increase in the second quarter, and a 112% increase year-on-year. SolarEdge is down 57% so far in 2023. —CNBC’s Michael Bloom contributed reporting.
