SolarEdge Technologies Inc. (SEDG) plunged 8.95% to $16.57 during intraday trading on Wednesday. The stock's downward movement came after Citigroup downgraded the solar energy company to a "Sell" rating from "Neutral" and lowered the price target to $9 from $12.
According to Citi analyst Vikram Bagri, the downgrade reflects concerns over SolarEdge's "tight liquidity, challenging earnings outlook, and intense competition." The brokerage cited the company's high operating costs relative to demand, despite recent restructuring announcements. Additionally, Citi expressed caution about the residential solar sector due to its dependence on incentives and weaker financial flexibility.
The analyst also noted that SolarEdge has failed to gain market share despite ongoing promotions, particularly in the European market where solar demand has been declining. Citi highlighted that the company assumes mid- to high single-digit overall price reductions year-over-year for 2025, with double-digit reductions expected in Europe.
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