What You Missed This Week in EVs and Clean Energy

Institutional investors and professional traders rely on The Fly to keep up-to-the-second on breaking news in the electric vehicle and clean energy space, as well as which stocks in these sectors that the best analysts on Wall Street are saying to buy and sell.

From the hotly-debated high-flier Tesla (TSLA), Wall Street’s newest darling Rivian (RIVN), traditional-stalwarts turned EV-upstarts GM (GM) and Ford (F) to the numerous SPAC-deal makers that have come public in this red-hot space, The Fly has you covered with “Charged,” a weekly recap of the top stories and expert calls in the sector.

TARGET CUT: Piper Sandler lowered the firm’s price target on Tesla to $290 from $300, while keeping an Overweight rating on the shares. The firm updated its model to reflect the recent disclosure of Q3 delivery results, as well as updated expectations for earnings. Piper’s estimates are moving slightly downward as a result of these changes. Cybertruck and Tesla’s other growth initiatives “are on the horizon,” and there is a reasonable likelihood that its margins will bottom in Q3, the firm tells investors in a research note. Still, Piper wouldn’t be surprised if Tesla “trades sideways, at best, in the coming months.” Looking into 2024, the firm says the company’s’ delivery growth will likely slow before reaccelerating, but it believes this is already reflected in Street estimates.

Click here to check out Tesla’s recent Media Buzz Sentiment as measured by TipRanks.

BUY RIVIAN: On October 10, UBS upgraded Rivian Automotive to Buy from Neutral with a price target of $24, down from $26. The firm sees a reduced probability of an additional capital raise over the next ~1 year with capital likely not needed until the end of 2025, and thinks the market can refocus on improving fundamentals with the raise out of the way. UBS is forecasting 2023 production of roughly 54,500 vs. guidance of 52,000, with the potential for a raise, and forecasts 10x unit growth by 2030.

MOVING TO THE SIDELINES: BMO Capital downgraded Enphase Energy (ENPH) to Market Perform from Outperform with a price target of $148, down from $175. The trough in U.S. residential solar demand appears to be deeper than anticipated and the timing of a recovery is uncertain, BMO tells investors in a research note. The firm now forecasts Enphase’s fiscal 2024 revenues up only a “modest” 2%. This makes it harder to continue to justify the magnitude of the company’s valuation premium BMO’s previously assumed.

UBS downgraded NextEra Energy Partners (NEP) to Neutral from Buy with a price target of $20, down from $74. Following the announcement reducing distribution growth expectations from 12% to 6% year-over-year, the firm sees limited near-term positive catalysts to drive a re-rating of the shares. NextEra Energy Partners is also facing considerable near-term low-cost debt maturities which could further limit its ability to fund new growth via asset acquisitions, UBS tells investors in a research note.

BofA downgraded Maxeon Solar (MAXN) to Neutral from Buy with a price target of $12, down from $31, as the firm grows “increasingly bearish” on resolution with SunPower (SPWR), margins in residential channels and end market demand. In August, Maxeon – which previously had been spun out of SunPower in 2019 – disclosed that contract relationships had deteriorated with SunPower late on payments while alleging that Maxeon had breached contract terms, BofA noted. Maxeon stopped shipments in late July, which caused it to cut its Q3 outlook earlier this month, and the firm expects this ongoing negotiation overhand to result in a deeper cut to fiscal year guidance along with Q3 results.

Roth MKM also downgraded Maxeon Solar to Neutral from Buy with a price target of $10, down from $25, after the company pre-announced Q3 to the downside, attributing the miss to the ongoing SunPower MSA dispute as well as the EU slowdown. While Maxeon is taking steps to re-prioritize capacity plans, reduce headcount, and expand the channel, the firm sees a number of headwinds in the near-term and is stepping to the sidelines until visibility improves.

ATTRACTIVE ENTRY POINT: Barclays upgraded First Solar (FSLR) to Overweight from Equal Weight with a price target of $224, down from $230. In an environment where there is uncertainty around the trajectory of utility-scale growth, First Solar’s contracted backlog, domestic content advantages and current valuation “offers an attractive entry point,” the firm tells investors in a research note. Barclays sees an attractive risk/reward at current share levels.