Solar Stock Makes Massive Breakout As Analyst Issues Street's Sole Buy Rating

SolarEdge Technologies (SEDG) broke out of a base and to the highest level in nearly two years after an analyst gave bullish comments on the maker of solar-power equipment.

Jefferies upgraded SolarEdge to hold from underperform and raised the price target to 49 from 30. The Middle East conflict is driving volatility in European energy prices, which Jefferies expects to increase demand for solar power, TheFly.com reported.

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The scenario echoes the Russia-Ukraine crisis, which boosted SolarEdge’s Europe revenue to a peak of $1.9 billion in 2023 from $630 million in 2020, Jefferies noted. The Iran crisis should cause a similar but less dramatic demand surge for SolarEdge.

Jefferies’ upgrade makes it the only buy recommendation among 28 analyst firms that cover the stock, according to FactSet. Most have hold ratings and four have sell ratings.

SolarEdge stock rallied more than 14% in heavy volume Friday morning, as it topped the 48.60 buy point of a cup base. The buy range goes to 51.03, so shares are already extended. Earlier this week, the stock rose above an early entry at 44.43. IBD MarketSurge shows the relative strength line is at new highs, a bullish sign.

It’s unusual to see such a potent breakout in the middle of a stock market slump. The high market risk also means stocks are more likely to fade from breakouts.

Israel-based SolarEdge is far from its all-time high of 389.71 in November 2021, but has been trending higher since it made a low at 11 last April. Shares have rallied more than 80% year to date. The stock is at the highest point since May 2024.

SolarEdge An Industry Leader

The stock has an IBD Composite Rating of 92, one of the highest in the solar energy industry group. The company’s earnings climbed 40%, 55%, 98% and 96% the past four quarters. Sales accelerated 7%, 9%, 44% and 71%. The company makes power optimizers, inverters and a monitoring platform for solar energy systems.

SolarEdge has a high 21-day average true range (ATR) of 8.75%. The average true range, available on MarketSurge, gauges the characteristic breadth of a stock’s behavior. Stocks with a high ATR tend to make large price moves that can trigger sell rules. Stocks with an ATR above 5% are considered riskier than those with lower ATRs. Stocks with lower ATRs tend to make more incremental moves.

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So far, surging energy prices haven’t given solar stocks much of a boost. IBD’s solar group reversed 2.5% higher this month but is still down about 8% year to date.

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