NEXTracker Sparks Goldman Analyst's Optimism Thanks To Tax Credits
Portfolio Pulse from Lekha Gupta
Goldman Sachs analyst Brian Lee initiated coverage on NEXTracker Inc (NASDAQ:NXT) with a Buy rating and a price target of $62. Lee anticipates that NXT will benefit from the IRA's 45X tax credits and international market penetration. He estimates an annual tax credit benefit of $80 million-$185 million, which could increase EPS by $0.55 to $1.25, representing a 20%-50% upside to FY25 estimates. Lee forecasts EPS growth to $2.15 in FY24, $2.62 in FY25, and $3.11 in FY26, with an expected earnings growth CAGR of ~20% through F2026. NXT's capex-light model is also expected to generate significant free cash flow. NXT shares rose 1.19% to $42.62.
January 16, 2024 | 5:42 pm
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Goldman Sachs analyst Brian Lee initiated coverage on NEXTracker Inc with a Buy rating and a $62 price target, expecting significant benefits from tax credits and international expansion, with a projected EPS increase and strong free cash flow generation.
The initiation of coverage by Goldman Sachs with a Buy rating and a high price target suggests strong confidence in NEXTracker's growth prospects, particularly due to the IRA's 45X tax credits and international expansion. The estimated significant increase in EPS and the capex-light business model leading to strong free cash flow generation are likely to be viewed positively by investors, potentially leading to a short-term increase in stock price.
CONFIDENCE 85
IMPORTANCE 90
RELEVANCE 100