What Happened?
Shares of solar energy systems company Shoals (NASDAQ: SHLS) jumped 5.1% in the afternoon session after UBS raised its price target on the stock to $9 from $7 and maintained its Buy rating. The firm pointed to Shoals' strong position to benefit from the growing demand for electricity and battery storage tied to data center expansion. In line with this outlook, UBS also increased its adjusted EBITDA estimates for 2025 through 2027. The higher forecasts were driven by expected revenue growth from Shoals' data center products and improved efficiency within its sales operations. The positive sentiment from UBS was consistent with that of other analysts, as eight had also revised their earnings estimates upward for the upcoming period.
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What Is The Market Telling Us
Shoals’s shares are extremely volatile and have had 62 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The previous big move we wrote about was 7 days ago when the stock gained 11.9% on the news that analysts from JPMorgan Chase & Co. and The Goldman Sachs Group raised their price targets on the stock. JPMorgan increased its price target to $9.00 from $8.00 and assigned the company an "overweight" rating. In a similar move, The Goldman Sachs Group lifted its price target to $8.00 from $7.00 and gave the company a "buy" rating. The positive sentiment was further supported by news from earlier in the month that Shoals had been issued a new U.S. patent. This development expanded its intellectual property portfolio for the Big Lead Assembly (BLA) wiring solution, highlighting the company's efforts in solar technology innovation.
Shoals is up 28.8% since the beginning of the year, and at $7.80 per share, has set a new 52-week high. Investors who bought $1,000 worth of Shoals’s shares at the IPO in January 2021 would now be looking at an investment worth $251.61.
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