Maxeon Solar (NASDAQ: MAXN) stock surged in pre-market trading Friday, even though Mizuho slashed its price target.
Maxeon Solar Technologies has encountered a notable shift in its stock’s financial outlook as Mizuho slashed the price target from $4.00 to $0.20. Despite this significant change, the firm has maintained a Neutral rating on the company’s shares.
The revision in the price target comes after Maxeon Solar secured new financing in June and forecasts a cash infusion from TZE in the latter half of 2024. The anticipated dilution from this arrangement has led to the adjustment of the price target. Additionally, Mizuho has decided to exclude any potential valuation associated with a U.S. factory from its price target. The firm cites uncertainties regarding the factory’s launch timing and competition from other industry expansions as reasons for this exclusion.
Moreover, the Mizuho analyst highlighted challenges in financing the U.S. factory. The firm stated that TZE’s ownership ties to China complicate obtaining a Department of Energy loan guarantee, making the financing difficult. Furthermore, there is currently limited visibility regarding alternative funding sources for the factory’s development.
Overall, the firm remained Neutral despite the lowered price target because it expects the cash from TZE to strengthen Maxeon Solar’s balance sheet. This financial backing should enable the company to maintain a cash balance greater than $100 million until it achieves an adjusted EBITDA recovery in 2025.
Maxeon Solar (NASDAQ: MAXN) Stock Reaction
As of 05:24 a.m. (Eastern Time) Friday, MAXN stock traded at $0.2751, marking a 14.29% increase compared to the previous trading session.
