Morgan Stanley initiated coverage with an "overweight" rating and $354 price target
With the renewable energy sector in the spotlight thanks to newly elected President Joe Biden, the shares of Solaredge Technologies Inc (NASDAQ:SEDG) are up 4.3% at $310 at last check, after Morgan Stanley initiated coverage with an "overweight" rating, and price target of $354. The firm called the company a "world leader in the solar photovoltaic inverter market" -- which, in layman's terms, is what converts solar energy into usable currents. The analyst in coverage believes SEDG will continue to grow and enter other markets as well, such as energy storage solutions.
After a Jan. 8 record high of $377, SEDG moved steadily lower on the charts until a particularly steep fall was caught by the 60-day moving average and $280 level at the end of last week. Despite the 4% deficit to start 2021, the shares have almost tripled in value in the last 12 months.
Two price-target hikes earlier in the week gave SolarEdge stock some momentum, but there is still plenty of room for further bull notes. Of the 14 analysts in coverage, eight carried a "hold" or worse rating coming into today. Plus, the 12-month consensus price target of $281.18 is an 8.1% discount to current levels.
Over in the options pits, long calls have been bought at a much faster-than-usual rate. This is per SEDG's 50-day call/put volume ratio of 1.61 at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), which sits higher than 95% of readings from the past year.
Lastly, SolarEdge stock's Schaeffer's Volatility Scorecard (SVS) sits at 93 out of 100, meaning the equity has tended to exceed option trader's volatility expectations over the past year -- a boon for option buyers.