BofA upgraded SolarEdge to Neutral from Underperform with a $29 price target. The shares are trading near five-year lows on softening residential demand, the analyst tells investors in a research note. The firm believes the company’s negative overhangs are reflected in the stock’s discounted valuation. The firm thinks the recent stock price pullback is pricing in an “unlikely worst-case scenario” of inventory write-downs, a lack of recovery in the inventory channel congestion through 2025 and aninability to monetize the balance sheet. While SolarEdge’s valuation “looks appealing” at current levels, BofA looks for a more tangible path to a margin and cash flow recovery before getting incrementally bullish on the stock.
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