UPDATE: Goldman Sachs Downgrades Shoals Technologies Group (SHLS) to Sell

September 8, 2022 3:05 AM EDT
Get Alerts SHLS Hot Sheet
Price: $21.36 --0%

Rating Summary:
    9 Buy, 6 Hold, 1 Sell

Rating Trend: = Flat

Today's Overall Ratings:
    Up: 8 | Down: 11 | New: 31
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(Updated - September 8, 2022 5:42 AM EDT)

Goldman Sachs analyst Brian Lee downgraded Shoals Technologies Group (NASDAQ: SHLS) from Buy to Sell with a price target of $21.00 (from $23.00).

The analyst comments "We downgrade shares of SHLS shares to Sell from Buy, with (16%) downside to our revised 12-month target of $21 ($23 prior) vs.~14% average upside across our solar coverage. Our Sell thesis is predicated upon our view that: 1) backlog growth has stagnated since the end of 2021, and we see downside risk to topline consensus expectations heading into 2023 which appear to be embedding an aggressive share gain and/or significant growth from non-solar / international expansion over the next 12 months, 2) there is muted operating leverage in the model as the company has not been able to drive significant earnings growth despite strong revenue growth in recent years, 3) current valuation of ~40x FY2 PE appears full given the aforementioned downside risks, and we believe the relative risk/reward skews less favorably at these levels compared to stocks with similar utility-scale exposure that have more attractive valuation and/or leverage to IRA benefits as outlined throughout this note, including ARRY, FSLR and MAXN. Since being added to the Americas Buy List on 5/19/2021, SHLS shares are up +16% vs. RUT (18%)."

For an analyst ratings summary and ratings history on Shoals Technologies Group click here. For more ratings news on Shoals Technologies Group click here.

Shares of Shoals Technologies Group closed at $27.76 yesterday.

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