SolarEdge Technologies (NASDAQ:SEDG) was cut to Equal Weight from Overweight, with the price target slashed to $152 from $275 per share at Barclays on Monday.
Analysts told investors in a note that they expect challenges to persist for the company beyond the near-term de-stocking issue due to inevitable ASP reductions, market share losses, and an FX rate that is currently trending unfavorably.
SEDG shares opened more than 3.5% lower at the start of Monday's session, trading just below the $125 mark.
"On the 2Q call, we weren't expecting SEDG's comments about how high US inventory levels had grown and were also surprised at the level of inventories in Europe, so we admittedly missed the call to downgrade the stock prior to the print," the analysts explained.
"Incremental data that we have seen on market share and SEDG's US shipments to date would indicate the company pushed too much inventory into the channel at the start of this year as demand was starting to weaken. Market share losses also appear to have resumed after a brief gain in share in the early months of 2023, exacerbating the issue," they added.
The analysts noted the de-stocking issue but believes 2024 "still has its challenges," with headwinds to watch out for, including "price cuts, market share losses, FX that is currently trending in an unfavorable direction, a slower than expected rebound in CA, and a potential slowdown in Europe."