Morgan Stanley analyst Andrew Percoco upgraded the rating on SolarEdge Technologies (SEDG – Research Report) to a Hold today, setting a price target of $18.00.
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Andrew Percoco has given his Hold rating due to a combination of factors surrounding SolarEdge Technologies’ recent financial performance and strategic outlook. In the fourth quarter of 2024, the company managed to surpass revenue expectations, but it fell short on margins primarily due to significant asset impairment charges, including a notable inventory write-down. This situation was exacerbated by declining demand in the European market, which led to a consecutive inventory adjustment.
Despite these setbacks, SolarEdge’s first-quarter 2025 guidance appeared more favorable than anticipated, partly attributed to safe harboring activities. The company’s improved strategic direction has also alleviated some liquidity concerns by enhancing free cash flow visibility. Nonetheless, Andrew Percoco advises caution, as the market environment remains unstable, justifying a Hold rating for investors considering the stock’s current positioning.