On Thursday, Truist Securities adjusted its outlook on SolarEdge Technologies (NASDAQ:SEDG), a company specializing in solar energy products. The firm reduced the price target for SolarEdge's shares to $60 from the previous $75 while maintaining a Hold rating on the stock.
The decision to lower the price target comes as SolarEdge navigates through several market challenges that affect sales volumes both in the United States and internationally. Truist highlighted the difficulties SolarEdge faces due to the complex management of its broad range of products and markets, which has continued to pressure the company's profit margins.
In the last quarter, SolarEdge had managed to address margin impacts related to its customer mix. However, this quarter, the sale of low-margin single-phase batteries against a backdrop of overall low revenue contributed to a shortfall in margins.
Truist's analysis indicates that the clearing of European channel inventory may progress more slowly than anticipated. Consequently, the firm has revised its financial estimates for SolarEdge for the fiscal years 2024 and 2025. This revision underpins the reduction in the price target to $60, reaffirming the Hold rating without suggesting any change to the investment stance on the company's shares.
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