** Shares of solar inverter maker SolarEdge Technologies SEDG.O fall 5.8% to $16.57 premarket

** Citigroup downgrades rating on SEDG to "sell" from "neutral", lowers price target to $9 from $12

** New PT represents a 49% downside to stock's last close

** Brokerage says it is cautious on residential solar sector, largely due to dependence of companies on incentives and relatively weaker financial flexibility

** "We are downgrading SEDG to sell due to its tight liquidity, challenging earnings outlook, and competition," Citigroup says

** Brokerage adds SEDG faces high operating costs despite restructuring announcements, especially relative to demand

** Stock fell 83% in 2024

(Reporting by Pooja Menon in Bengaluru)

((Pooja.Menon@thomsonreuters.com;))