Benzinga - Shares of Nextracker Inc (NASDAQ: NXT) rose in early trading on Monday.
- Bank of America Securities analyst Julien Dumoulin-Smith initiated coverage with a Neutral rating and price target of $36.
- KeyBanc Capital Markets analyst Sophie Karp began coverage of the stock with a Sector Weight rating.
- Mizuho Securities analyst Anthony Crowdell started coverage with a Buy rating and price target of $40.
- Roth Capital Partners analyst Philip Shen initiated coverage with a Buy rating and price target of $45.
BofA Securities
- Nextracker is the market leader in solar trackers and its solution “makes it simple for buyers to keep buying,” Dumoulin-Smith said in an initiation note.
- “The company is known for these value-added solutions which work to shave O&M cost and increase energy yield over the life of the asset, mirroring the buying parties long dated return profile,” the analyst wrote. “And in solar, a minute savings over many years matters a lot – we benchmark that just a 1% savings in O&M over the life of an asset can add 150bps to typical levered return, expanding it by ~15%."
- “NXT is well positioned to capitalize on the projected growth in utility-scale solar deployment,” Karp said.
- “While we like NXT’s competitive positioning, long-term growth prospects, and margin expansion potential, we believe that after the post-launch outperformance, the shares are close to fairly valued, presenting a balanced risk-reward at this juncture,” she added.
- “NXT stands to benefit from the global transition to renewable energy,” Crowdell wrote in his initiation note.
- “NXT's proprietary technology has a proven track record of improving the economics of utility-scale solar projects by lowering lifetime costs and improving energy output, giving NXT a ~30% global market share,” he added.
- “Following the passage of the Inflation Reduction Act in 2022, we see a "wall of demand" in the US, and we expect NXT to be a key beneficiary,” Shen said. The company should benefit from other tailwinds, like secular growth in utility-scale solar and “trackers rapidly surpassing fixed-tilt solutions.”
- “We believe the company is on sound financial footing, with strong liquidity, manageable debt, a capex-lite model, and an end market (utility-scale solar) that is poised for hyper-growth,” he added.
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