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Baird downgraded the stock to Underperform, which is its version of a sell rating. This move follows the company's decision to lower its financial targets for the year, a sign that it is struggling to turn its large backlog of contracts into actual revenue as quickly as planned.
While the average analyst target for the stock sits at $12, this downgrade reflects growing concern that the path to consistent profit is taking longer than expected. For a company building the battery infrastructure for the energy transition, these delays in project timing are the main risk to the business.
Fluence lowered its expectations for the current fiscal year on Wednesday, citing supply chain issues that are slowing down production in the U.S. These delays make it harder for the company to turn its large backlog of signed contracts into actual revenue on the schedule it originally promised.
This is a setback for the company's plan to reach a profitable scale by the end of 2026. For long-term owners, the concern is whether these manufacturing hurdles are a temporary delay or a sign that the company will struggle to meet the massive demand for energy storage infrastructure.
Source: GlobeNewsWire
Fluence appointed Bernerd Da Santos as its new Executive Vice President and Chief Operating Officer. He resigned from the company's board on September 14 to take the role, which became effective the following day. Da Santos previously held several leadership positions at AES, a major power company and one of Fluence's largest shareholders.
He will now oversee the company's manufacturing, supply chain, and product teams. Bringing in an experienced operations leader from a top shareholder suggests the company is focused on fixing the production and supply chain issues that have recently slowed its growth.
Source: 8-K filing
BMO Capital lowered its price target for Fluence to $7 on Thursday, down from a previous target of $14. This move follows the company's announcement that it would not meet its original financial goals for the year due to manufacturing delays. While the firm lowered its target significantly, the new $7 level is close to where the stock is currently trading. This suggests analysts are resetting their expectations to match the company's slower pace of growth as it works through its supply chain problems.
Source: BMO Capital
Piper Sandler set a price target of $6 for the company on Tuesday. This is well below the current price of about $10 and the average analyst target of $16. While one firm's target does not change the business, it highlights a growing gap in how analysts see the company's value.
Fluence is working through a large backlog of battery projects, but a target this low suggests concerns about how quickly those contracts will turn into actual profit. If other firms follow with similar cuts, it could signal that the path to reaching its 2026 financial goals is getting harder.
Source: Piper Sandler
Management has missed its own profit targets in five of the last eight quarters, showing they are still struggling to accurately forecast the costs of scaling up their manufacturing.
| Expectation | |
|---|---|
| EPS | $0.19 |
| Revenue | $1.10B |
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