Fluence Energy (FLNC – Research Report), the Utilities sector company, was revisited by a Wall Street analyst today. Analyst Jon Windham from UBS downgraded the rating on the stock to a Hold and gave it a $8.00 price target.
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Jon Windham has given his Hold rating due to a combination of factors impacting Fluence Energy’s financial outlook. The company recently revised its FY2025 adjusted EBITDA guidance downward by approximately 50%, citing reduced expected gross margins on newly signed contracts and delays in projects scheduled for 2025. This has raised concerns about the company’s pricing power and its ability to maintain profitability in its integrator business model, despite a projected 80% year-over-year growth in storage in the Americas for 2024.
Additionally, Fluence Energy faces risks related to its reliance on China for battery supplies, which could be exacerbated by potential changes in U.S. renewable tax policies. Despite a substantial backlog exceeding $5 billion and a depressed valuation with shares at multi-year lows, investor confidence may be hindered by execution risks and the company’s current financial challenges. The reduced price target of $8 reflects these concerns, aligning Fluence Energy with similar clean energy hardware companies facing market uncertainties.
In another report released today, Roth MKM also downgraded the stock to a Hold with a $6.50 price target.