Jeff Osborne, an analyst from TD Cowen, maintained the Hold rating on Ormat Techno. The associated price target was raised to $85.00.
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Jeff Osborne has given his Hold rating due to a combination of factors that present both opportunities and challenges for Ormat Technologies. On the positive side, the company has reaffirmed its 2025 guidance with strong revenue and adjusted EBITDA projections, indicating confidence in its future performance. The storage segment shows promising growth with rising gross margins, and the company is in advanced negotiations for power purchase agreements with data center clients, which could enhance its customer mix and pricing.
However, there are some concerns that temper the overall outlook. The product backlog has seen a decline, and while efforts are underway to secure new tenders, particularly in Indonesia, the immediate impact remains uncertain. Additionally, the electricity segment faces margin pressures due to ongoing curtailment and pricing challenges. Furthermore, while exploration and enhanced geothermal systems (EGS) initiatives are progressing, their commercial viability is still years away and contingent on technical validation. These mixed dynamics contribute to the Hold rating, reflecting a balanced view of the company’s prospects.
In another report released yesterday, Piper Sandler also maintained a Hold rating on the stock with a $78.00 price target.