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On Friday, BMO Capital initiated coverage on shares of Nextracker Inc (NASDAQ:NXT), a leading solar tracker equipment and technology provider, with a Market Perform rating and a price target of $69.00. The firm’s stance is influenced by the positive outlook on the global demand for solar trackers, anticipating a significant market expansion outside of China by the end of the decade.
Nextracker, which went public in February 2023, has been noted for its strong performance post-IPO. The company is recognized for holding the number one position in market share within its industry. BMO Capital’s analysis suggests that Nextracker’s EBITDA for the fiscal year 2025 is projected to be four times the level of fiscal year 2021.
The firm’s decision to maintain a Market Perform rating, despite acknowledging Nextracker’s leading market position and robust execution, is attributed to the recent outperformance and current valuation of the company’s shares. The analyst from BMO Capital mentioned, “Since its February 2023 IPO, it has executed better than most of our coverage as we estimate FY 2025E EBITDA is up 4x vs. FY 2021 levels.”
The price target of $69.00 reflects the firm’s assessment of Nextracker’s future financial performance and market conditions. While BMO Capital is constructive on the overall sector, the analyst indicates a cautious approach by stating, “Magnitude of recent outperformance/valuation keeps us on sideline,” suggesting a wait-and-see position regarding the stock’s future movements.
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