Jefferies has moved SolarEdge to a Hold rating from underperform and raised its price target to $49 from $30, saying renewed volatility in European energy markets linked to the Middle East conflict could bolster demand for solar and storage. Shares of the company were up about 4% in premarket trading on Friday.
The brokerage pointed to a precedent for such dynamics: surging gas prices after the Russia-Ukraine war coincided with a marked increase in European solar uptake, a shift that helped push SolarEdge's regional revenue from $630 million in 2020 to $1.9 billion in 2023.
Jefferies highlighted that European gas prices, measured by the TTF benchmark, have risen roughly 94% since the latest conflict began. That jump in gas pricing is seen as a potential catalyst for households and businesses to seek more stable energy costs through solar generation and storage systems.
At the same time, Jefferies cautioned that any rebound in demand is likely to be more moderate than the surge witnessed between 2020 and 2023. The firm noted that renewable penetration is already higher and that, in spite of rising gas costs, power prices have remained relatively stable. Those factors support a more measured outlook for near-term upside.
On SolarEdge's operational picture, Jefferies said the company's earnings outlook has improved. The brokerage pointed to stabilizing conditions in Europe following a period of inventory correction, and to market-share gains in commercial and industrial segments while the company has retained a steady position in the residential market. Jefferies expects further share gains in 2026.
Reflecting these assumptions, Jefferies increased its revenue forecasts for 2027 and 2028 by 17% and 19%, respectively, while keeping its 2026 forecast largely unchanged as customers adopt a cautious posture amid uncertainty.
Despite the more constructive earnings view and the higher price target, Jefferies did not assign a Buy rating. The brokerage cited valuation considerations: SolarEdge shares have risen about 60% year-to-date and were trading near 18x estimated 2027 EV/EBITDA, a multiple slightly above peers. Jefferies said this suggests the market already factors in expectations of stronger demand and market-share improvement.
Contextual note - The commentary reflects Jefferies' published views on SolarEdge's outlook, valuation and the potential impact of energy price volatility on solar and storage demand in Europe.