Morgan Stanley downgrades SolarEdge to Underweight on longer path to profits

Morgan Stanley analyst Andrew Percoco downgraded SolarEdge (SEDG) to Underweight from Equal Weight with a price target of $9, down from $23. The firm also reduced its industry view on clean technology to In-Line from Attractive, saying there is an added level of uncertainty in the market as to how the policy environment for renewables will change under the newly elected administration. For SolarEdge, the analyst sees an elongated path back to profitability due to deteriorating demand in Europe and strong pricing competition from low-cost Chinese manufacturers selling product into the market. These pose a risk to SolarEdge’s path back to strong run-rate margins and sustainable cash generation, the analyst tells investors in a research note.