What Happened?
Shares of solar power systems company SolarEdge (NASDAQ: SEDG) jumped 8.5% in the morning session after Barclays raised its price target on the stock to $36 from a previous $29.
The significant 24% increase in the price target was announced by analyst Christine Cho. However, Barclays maintained its 'Equal-Weight' rating on SolarEdge. This action suggested a more favorable view of the company's potential stock price, even while the firm's overall stance on the stock remained neutral. The stock's rise also occurred amid a generally positive feeling in the green energy sector, which was seen as having strong momentum.
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What Is The Market Telling Us
SolarEdge’s shares are extremely volatile and have had 92 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 6 days ago when the stock dropped 4.8% on the news that Jefferies raised its price target for the company but kept its 'Underperform' rating, a signal of continued caution about the stock's future.
The investment firm lifted its target to $24 from $20, but this new price still represented a significant downside from the stock's last closing price. Jefferies voiced concerns that the stock's strong rally had made it overvalued and noted potential risks in the company's ability to carry out its plans. The firm also projected that SolarEdge's sales volumes would grow more slowly than the market expected and did not see the company generating core profits through 2027.
Adding to the cautious outlook, the wider view from analysts was also negative, with a consensus 'Sell' rating and an average price target that pointed to a potential drop in the stock's value.
SolarEdge is up 174% since the beginning of the year, and at $40.57 per share, has set a new 52-week high. Investors who bought $1,000 worth of SolarEdge’s shares 5 years ago would now be looking at an investment worth $132.85.
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