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BofA analysts raised Nextracker (NASDAQ:NXT) to Buy from Neutral, increasing the firm’s price target on the stock to $40 from $36 in a research note Wednesday.
The analysts told investors that leading indicators suggest CY23 is due for an upward reset. They also listed three reasons for the upgrade, including the fact that the company’s project deliveries are accelerating.
“We track 3GW of US projects realizing active delivery today and close to 6GW of projects with some level of active delivery in the last quarter, which compares with 5.8GW total (including Int) recognized in 4Q22,” the analysts wrote. “FSLR leverage looks robust, out of 6GW, we track nearly 40% as FSLR and principally via portfolio type deals.”
In addition, they explained that with 10GW of announced US steel capacity and more showing up recently, they are confident in NXT’s IRA positioning.
“Our review of interpretations on domestic content suggest that NXT likely has the right sourcing for the right components from the right suppliers to qualify and claim credits,” added the analysts.
BofA also feels that with investors seeking defensive ways to leverage growth in cleantech while avoiding capital markets risk and consumer trends, “NXT checks all the right boxes.”
