Nextracker (NASDAQ:NXT) gained 5% in Monday morning trading following an upgrade by Guggenheim, which raised the solar tracker maker from Neutral to Buy with a $74 price target, implying roughly 22% upside from Friday’s close at $60.58.
The move comes after the IRS issued updated safe-harbor rules, which Guggenheim analyst Joseph Osha said would benefit tracker manufacturers like Nextracker. The new rules specifically recognize racking installation as qualifying activity under the physical work test for tax credits.
Osha commented, “We believe that Friday’s safe-harbor clarifications from the IRS were good news for tracker suppliers like NXT.”
The IRS guidance allows “off-site work of a significant nature” to count toward tax credit eligibility, provided it is tied to a particular project. This includes installation of mounting equipment, support structures, and power conditioning devices—key components in Nextracker’s operations.
Guggenheim noted that tracker firms with established U.S. supply chains are well-positioned to gain as developers navigate Foreign Entity of Concern (FEOC) limits, with further guidance on FEOC compliance potentially expected this week.
Despite Nextracker’s shares rising 50% over the past year compared with the S&P 500’s 15% gain, Guggenheim views the stock as attractively valued at 10.2x 2025 EBITDA and 9.6x 2026 EBITDA, setting a 12x 2026 EBITDA target multiple to support the $74 price objective.
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