Bank of America says this under-the-radar solar tracker company can rise 23%
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Solar solutions company Nextracker is a market leader in both technology and share, according to Bank of America. Analyst Julien Dumoulin-Smith upgraded Nextracker to buy from neutral. Dumoulin-Smith also raised his price target for the company's shares to $40 from $36, implying 23% upside from Tuesday's close price. He raised his estimates as he anticipates Nextracker receiving credits from the Inflation Reduction Act. The company makes solar trackers and software. "We continue[s] to see NXT as a market leader both in technology and share, and a best-in-class way to participate in a relatively low risk offensive story in 2023 offering compelling return from current levels," Dumoulin-Smith wrote in a Wednesday note. Nextracker made its public debut in February. Shares gained roughly 5% in midday trading Wednesday. NXT 3M mountain Nextracker stock More specifically, Dumoulin-Smith said that Nextracker is on track for an upward trajectory in 2023 as project deliveries accelerate. The analyst said that he sees an "upside on near-term numbers via an impressive set of large-scale multi-year project exposures that we believe can offer line of sight through both 2023 and 2024." "Critically, we see the cadence of tracker deliveries followed by panel deliveries in just the last few weeks as a strong sign that reacceleration in US utility scale is happening in real time," Dumoulin-Smith said. "We reiterate significant 'pent up' project demand for NXT in the form of multi-year 'cluster' contracts that are likely catalyzed to move up in construction schedule by confidence in panel deliveries. Watch this [as] the key driver of compounding growth in 2024," he continued. —CNBC's Michael Bloom contributed to this report.