SolarEdge Stock Tumbles As Morgan Stanley Analysts Reiterate ‘Underweight’ Rating: Retail Sentiment Dips

Shares of SolarEdge Technologies (SEDG) tumbled in mid-day trade on Wednesday after Morgan Stanley analysts reiterated their “Underweight” rating for the stock.

SolarEdge stock was down more than 13% at the time of writing, as Morgan Stanley analysts underscored lingering risks.

“SEDG announced a headcount reduction and several important strategic agreements that turn us modestly more positive on the outlook for the shares,” the brokerage said in a recent note.

On Monday, SolarEdge announced its fourth round of layoffs in 12 months as the company looks to trim its operating costs.

As a result, 400 employees were impacted, and the company expects this restructuring to cost between $3 million and $5 million. However, it expects to save between $9 million and $11 million in quarterly expenses.

Despite this, Morgan Stanley analysts are not completely optimistic about SEDG stock’s prospects.

“We reiterate our UW due to lingering risks to its turnaround story, but recognize that its recent strategic initiatives are steps in the right direction,” the report noted.

It highlighted SEDG’s concentration risk due to its exposure to the European solar market, which is witnessing lackluster demand.

This dampened investor sentiment on Stocktwits, from being ‘extremely bullish’ (84/100) a day ago to ‘bearish’ (43/100).

However, some users remained upbeat about the SEDG share price, with one user using this as an opportunity to stock up.

Not everyone is convinced, however.

Despite reiterating the “Underweight” rating, Morgan Stanley raised its price target on the stock to $11 from $9, implying a downside of 29%.

SolarEdge’s shares have declined over 43% in the past six months and over 80% in the past year.

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