Shares of SolarEdge Technologies (NASDAQ:SEDG) have jumped today, up by 9% as of 3:30 p.m. EDT, despite Barclays initiating coverage on the stock with an equal weight rating (equivalent to neutral). The pop is more likely attributable to a broad market rally driven by continued hopes around a massive economic stimulus bill to help mitigate the impact of the COVID-19 pandemic.
The $2 trillion aid bill is moving through Congress following negotiations among lawmakers. They're scheduled to vote on the package today. Markets also skyrocketed yesterday on the same hopes.
Meanwhile, Barclays analyst Moses Sutton started off SolarEdge shares with a lukewarm rating and assigned a price target of $99. SolarEdge makes power inverters, which are necessary to convert sunlight into electricity, for solar photovoltaic systems.
Sutton recommends that investors consider rival Enphase Energy (NASDAQ:ENPH) instead, assigning an overweight rating (equivalent to a buy) on Enphase shares alongside a $67 price target. Enphase is growing faster and has a stronger balance sheet, according to the analyst.
The coronavirus outbreak has sparked fears that the global economy could dip into a recession, as businesses all around the world have been shuttered in an effort to contain the disease. Sutton believes that the leading companies within the solar power inverter industry -- SolarEdge and Enphase -- are better positioned to weather the macroeconomic downturn that COVID-19 will cause.