Shares of SolarEdge Technologies Inc (NASDAQ:SEDG) are up 8% at $32.26 this morning, after UBS upgraded the solar energy stock to "buy" from "neutral" and raised its price target to $42 from $36. The firm cited an attractive valuation and said SolarEdge could benefit from new U.S. restrictions on foreign-made power inverters.
Today's pop has SEDG bouncing from a familiar floor at the $30 level, though the shares remain below their 20-day moving average, which currently sits near $34. The equity is up 12.1% year to date, but has shed 25.1% in the last month and 44.8% this quarter.
The upgrade goes against an overwhelmingly bearish analyst backdrop. Before today's bull note, all 23 analysts in coverage carried a "hold" or worse rating, including four "strong sell" recommendations. This leaves plenty of room for additional upgrades should other firms follow UBS' lead.
Short sellers could provide additional fuel for the shares. The 11.06 million shares sold short account for 18.20% of SolarEdge stock's available float, or more than three days' worth of pent-up buying power.
Options traders have been unusually bullish, however. At the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and Nasdaq OMX PHLX (PHLX), SEDG's 10-day call/put volume ratio of 9.78 ranks higher than 99% of readings from the past year, indicating calls have been picked up over puts at a much faster-than-usual pace during the past two weeks.
