What happened
Despite hitting a speed bump in the middle of the month when it reported Q2 2022 earnings, Maxeon Solar Technologies (MAXN -7.08%) ended August on a high note, flying more than 15% higher.
And the solar stock has shown no sign of slowing down in September. While it dipped during the first two days of the month, Maxeon's stock has roared back this week, thanks to an analyst's bullish commentary.
As of 3:16 p.m. ET, shares of Maxeon are up 22.5%, according to data from S&P Global Market Intelligence.
So what
Taking a notable turn from a bearish position on Maxeon's stock to a considerably more bullish one, Brian Lee, an analyst at Goldman Sachs, hiked his price target to $27 from $9 on Wednesday. Based on the stock's closing price of $21.22 on Wednesday, Lee's new price target represents upside of 27.2%. In addition, Lee upgraded the stock to buy from sell.
According to Thefly.com, Lee predicated his new bullish perspective on the belief that Maxeon has an opportunity to benefit from the Inflation Reduction Act, projecting that the company could see growth on its bottom line in 2025 if it succeeds in expanding production capacity.
The recently passed legislation includes a variety of provisions that address solar energy. Providing $369 billion in funding to fortify America's energy security, the Inflation Reduction Act establishes a 30% investment tax credit for solar power-related manufacturers and their eligible expenses related to equipment and facilities.
Now what
While Lee's bullish opinion of Maxeon's stock is powering investors' excitement, it's important to reflect before rushing out to buy shares of this solar business and potentially getting burned. Analysts often have shorter investing horizons than the multiyear holding periods that we prefer.
Therefore, investors interested in gaining solar industry exposure should not only dig deeper into Maxeon, but they should also investigate some of the other solar stocks to see which is the best fit for them.
