By Sam Boughedda
Wall Street analysts are bullish on Nextracker (NASDAQ:NXT), with the stock initiated with Buy ratings by most firms on Monday following its February 9 IPO.
Truist analysts initiated the solar stock with a Buy rating and $40 price target, telling investors in a note that they see NXT shares "further appreciating toward broader solar-peer avg. multiples" as the company "benefits from accelerated growth in utility-scale solar."
"Further, we see upside to NT margin expansion from IRA provisions & growth in NXT's TrueCapture software business," wrote analysts.
Roth/MKM analysts initiated coverage on Nextracker with a Buy rating and $45 price target, stating the company has a leading market share in the U.S. and internationally and is "considered best-in-class."
"Following the passage of the Inflation Reduction Act in 2022, we see a "wall of demand" in the US (see here), and we expect NXT to be a key beneficiary. Trading at ~20x our 2023 EBITDA, look for strong bookings ahead as a key upside catalyst for the stock," wrote analysts.
At Mizuho, analysts started NXT at Buy with a $40 per share price target, explaining that it stands to benefit from the global transition to renewable energy.
"Global clean energy policies should accelerate the transition to zero-emission generation, and utility-scale solar will likely play a larger role after years of falling costs," said analysts. "NXT's proprietary technology has a proven track record of improving the economics of utility-scale solar projects by lowering lifetime costs and improving energy output, giving NXT a ~30% global market share."
Barclays started Nextracker at Overweight, with analysts stating that the firm sees the solar company as "well positioned to take advantage of the macro tailwinds benefitting renewables more broadly."
The outlier on Monday was BofA, who started NXT at Neutral with a $36 price target. Analysts said the company is "best in breed," but it is "fairly valued post IPO."
NXT shares are up over 1% premarket.