Analysts at Goldman Sachs upgraded shares of Shoals Technologies Group Inc (NASDAQ:SHLS) to Buy from Neutral, with a price target of $28 per share in a note Wednesday, implying a potential 85% upside from current levels.
The analysts told investors the firm is tactically more bullish on the stock, given the overhang from the recent warranty expense issues appears to be priced in. They now see margin upside risk skewed to the upside.
Furthermore, "US utility-scale solar fundamentals remain among the best in our solar coverage group and we still see multiple catalysts on the horizon heading into what should be a robust 2024 growth backdrop," the analysts noted.
The Goldman Sachs team noted that SHLS's valuation is at historical lows and they see the risk-reward as hard to ignore, despite some of the idiosyncratic and macro challenges that have weighed on the stock of late.