Key Points
In pre-market trading on Friday, SolarEdge (SEDG) shares rose approximately 4%, thanks to an upgrade from Jefferies analysts and their optimistic outlook for the company.
Jefferies upgraded its rating on SEDG from “Underperform” to “Hold” and raised the price target from $30 to $49, implying a potential upside of about 7.3% compared to Thursday's closing price.
The adjustment in Jefferies' outlook for SEDG is primarily influenced by dynamics in the energy market. Since the recent outbreak of conflict in the Middle East, natural gas prices in Europe (measured by the TTF benchmark) have surged by approximately 94%. Such a dramatic price increase typically drives consumers and businesses to turn to solar and energy storage solutions to mitigate energy cost fluctuations.
Although Jefferies acknowledges that a complete replay of this price surge seems unlikely, Europe’s renewable energy infrastructure has significantly matured, and electricity prices have remained relatively stable despite rising gas costs. The increase in demand may be more gradual.
However, the investment firm believes that SolarEdge's market positioning is stronger than ever. The inventory adjustments that previously pressured financial performance have largely been resolved, and SEDG has expanded its influence in the commercial and industrial sectors while maintaining its share in the residential market.
Updated Revenue Forecasts
Jefferies has raised its revenue expectations for 2027 by 17%, and for 2028 by 19%. The forecast for 2026 remains largely unchanged, as the company notes that macroeconomic uncertainties have led clients to adopt a wait-and-see approach.
Despite the rating upgrade, Jefferies has not issued a “Buy” recommendation, with valuation concerns being the primary reason for its cautious stance. SEDG has risen about 60% year-to-date in 2026, with its current trading price approximately 18 times the projected EV/EBITDA for 2027, slightly above its peers. Jefferies believes the market has already priced in expectations for improved demand and competitive positioning.
The broader analyst community remains cautious. Among the 25 analysts tracking SEDG, only one recommends buying, 18 rate it as a hold, and six suggest selling. MarketBeat's consensus rating is “Reduce,” with an average price target of $29.09, significantly below current trading levels.
Latest Quarterly Performance
SolarEdge's recent quarterly performance exceeded Wall Street expectations. The company reported earnings per share of -$0.14, surpassing the market consensus of -$0.19. Revenue reached $333.8 million, exceeding the forecast of $330.3 million, marking a year-over-year increase of 70.9%.
Net profit remains in negative territory at -34.23%, with analysts expecting an earnings per share of -$4.54 for the current fiscal year.
Institutional investors control about 95% of the float. Several major shareholders have increased their stakes in recent quarters, with UBS Group notably raising its holdings by 234%.