SolarEdge Stock Drops After Downgrade: Why Analysts Disagree With Goldman Sachs

SolarEdge Technologies (NASDAQ:SEDG) shares plummeted on Wednesday after Citi downgraded the solar stock from Neutral to Sell with a $9 price target. The downgrade was driven by concerns over tight liquidity, weak earnings prospects, and declining market conditions in Europe. However, this bearish stance contrasts with Goldman Sachs' recent double upgrade to Buy, where analysts argued that market fears may be overstated. This article explores the differing opinions of analysts and the key factors driving SolarEdge's recent stock performance.



Citi analyst Vikram Bagri pointed to shrinking European solar demand and noted that despite ongoing promotions, SolarEdge has not been able to increase its market share. The company also forecast mid to high single-digit price reductions for 2025, with European prices expected to drop by double digits. These factors, along with the company's tight liquidity situation and weak earnings prospects, led Citi to downgrade the stock.

On the other hand, Goldman Sachs analysts reportedly gave SolarEdge a double upgrade, changing their rating from "sell" to "buy" and raising their price target to $19 from $10. They stated that concerns over SolarEdge's $350 million debt may be "overblown" and that the recent restructuring of the Energy Storage division could improve the company's product sales mix.



The table below summarizes the recent analyst ratings and price targets for SolarEdge, highlighting the mixed sentiment among analysts:

| Analyst | Rating | Current Price Target | Prior Price Target |
| --- | --- | --- | --- |
| Gordon Johnson (GLJ Research) | Sell | $3.90 | $3.90 |
| Christine Cho (Barclays) | Underperform | $7.00 | $17.00 |
| Andrew Percoco (Morgan Stanley) | Underweight | $9.00 | $23.00 |
| Jon Windham (UBS) | Neutral | $18.00 | $26.00 |
| Jordan Levy (Truist Securities) | Hold | $15.00 | $20.00 |
| Jeffrey Osborne (TD Cowen) | Hold | $11.00 | $16.00 |
| Ameet Thakkar (BMO Capital) | Market Perform | $12.00 | $21.00 |
| Brian Lee (Goldman Sachs) | Sell | $10.00 | $19.00 |
| Philip Shen (Roth MKM) | Neutral | $12.00 | $20.00 |
| Biju Perincheril (Susquehanna) | Neutral | $11.00 | $20.00 |
| Kashy Harrison (Piper Sandler) | Underweight | $9.00 | $17.00 |
| Mark Strouse (JP Morgan) | Overweight | $29.00 | $35.00 |
| Vikram Bagri (Citigroup) | Neutral | $19.00 | $31.00 |
| Philip Shen (Roth MKM) | Neutral | $20.00 | $23.00 |
| Jeffrey Osborne (TD Cowen) | Hold | $16.00 | $35.00 |
| Kashy Harrison (Piper Sandler) | Neutral | $17.00 | $25.00 |
| Joseph Osha (Guggenheim) | Sell | $10.00 | - |
| Biju Perincheril (Susquehanna) | Neutral | $20.00 | $24.00 |
| Chris Dendrinos (RBC Capital) | Sector Perform | $25.00 | $35.00 |
| Ameet Thakkar (BMO Capital) | Market Perform | $21.00 | $24.00 |
| Christine Cho (Barclays) | Underweight | $17.00 | $26.00 |
| Julien Dumoulin-Smith (B of A Securities) | Neutral | $21.00 | $22.00 |
| Andrew Percoco (Morgan Stanley) | Equal-Weight | $23.00 | $28.00 |
| Maheep Mandloi (Mizuho) | Outperform | $35.00 | $40.00 |
| Julien Dumoulin-Smith (Jefferies) | Underperform | $17.00 | $27.00 |
| Julien Dumoulin-Smith (Jefferies) | Hold | $27.00 | - |

The average price target for SolarEdge has dropped significantly over the past three months, from $24.08 to $16.73. This decline reflects the bearish sentiment among analysts, who have lowered their expectations for the company's stock price.

In conclusion, the differing opinions of analysts on SolarEdge's stock performance can be attributed to various factors, including earnings misses, layoffs, debt concerns, market conditions, and analyst ratings. While Citi downgraded the stock due to weak earnings prospects and declining market conditions, Goldman Sachs' bullish stance is driven by their view that market fears may be overstated. As SolarEdge continues to navigate challenging market conditions and restructuring efforts, investors should closely monitor the company's performance and the evolving sentiment among analysts.