3 energy storage-focused stocks upgraded at Citi

Investing.com -- Several clean energy companies received rating upgrades from analysts who pointed to improving growth prospects in domestic manufacturing, energy storage demand and hyperscale data center opportunities, despite ongoing policy and execution risks.

Analysts upgraded Canadian Solar to Neutral from Sell and raised their price target to $18 per share from $11, citing stronger prospects from the company's shift toward higher-margin U.S. solar module manufacturing and expanding energy storage operations.

The firm said Canadian Solar's domestic manufacturing strategy could unlock additional value through production tax credits and sales of high-efficiency heterojunction (HJT) modules. Analysts also expect the company's storage business volumes to roughly double year over year, outpacing some peers and potentially securing its first hyperscale customer in the coming months.

However, they retained a cautious stance because of uncertainties surrounding foreign entity of concern (FEOC) rules, a pending International Trade Court case, and expectations for near-term pressure from limited photovoltaic cell capacity and rising lithium carbonate prices.

Fluence Energy was upgraded to Buy from Neutral, although its price target was trimmed to $24 per share from $26. Analysts said the battery storage provider offers an attractive risk-reward profile ahead of earnings and is well positioned to capture a growing share of demand from hyperscale customers such as large data center operators.

They cautioned that about half of Fluence's fiscal 2026 revenue guidance is weighted toward the fourth quarter, exposing the company to project timing risks. Additional concerns include the need for substantial backlog additions to support fiscal 2027 revenue expectations, potential equity issuance to fund growth and continued selling by existing shareholders.

Still, analysts said a major hyperscaler contract win and continued expansion of the company's project pipeline could provide meaningful upside for the shares.

Energy Vault was also upgraded to Buy from Neutral, while its price target was lowered slightly to $5 per share from $5.25 due to a higher share count.

Analysts highlighted improving fundamentals, including a significant increase in backlog and the appointment of a new chief financial officer with experience in energy and infrastructure financing. They said the executive's background could help reduce the company's cost of capital and support future growth initiatives.

The brokerage added that Energy Vault shares have fallen about 30% quarter-to-date, significantly underperforming storage peers, creating a more attractive entry point for investors. It noted that consensus EBITDA forecasts for fiscal 2026 and 2027 have remained stable since June, while signs of crowded bullish positioning in the stock have eased considerably.

You May Also Be Interested In

• Alphabet Sees FY26 Capex $195B To $205B, Saw $180B To $190B
• Es Bancshares, Inc. (ESBS) Tops Q2 EPS by 13c
• Lake Shore Bancorp (LSBK) Tops Q2 EPS by 29c