Morgan Stanley analyst Andrew Percoco has maintained their neutral stance on ARRY stock, giving a Hold rating on June 20.
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Andrew Percoco has given his Hold rating due to a combination of factors surrounding Array Technologies’ recent acquisition of APA Solar. The acquisition is expected to expand Array’s total addressable market by approximately 40%, integrating APA’s foundation solutions and fixed-tilt mounting systems into its product offerings. This strategic move aligns Array more closely with its peers and is anticipated to be accretive to earnings per share in the first year post-acquisition.
Despite the potential benefits, the acquisition comes with a significant financial commitment, with a transaction price implying a 7.6x EV/EBITDA multiple, excluding tax credits. While Array expects to achieve synergies in technical expertise, manufacturing, supply chain management, and customer relationships, the execution of these synergies remains uncertain. Additionally, the company’s cash position post-acquisition and the structured earnout agreement introduce elements of financial risk. These factors contribute to the Hold rating, as they present both opportunities and challenges for Array Technologies moving forward.
In another report released on June 20, Mizuho Securities also maintained a Hold rating on the stock with a $9.00 price target.
ARRY’s price has also changed moderately for the past six months – from $5.630 to $7.400, which is a 31.44% increase.