Ormat Technologies Shares Slide on Underperform Rating, $115 Price Target
ORA•Ormat Technologies shares fell in premarket trading after Bernstein initiated coverage with an underperform rating and a $115 price target, roughly 14% below the prior close. The analyst cited conventional geothermal exploration risks, uncertainties around enhanced geothermal system trials and noted energy storage accounts for only 10% of revenue.
1. Coverage Initiation and Price Target
Ormat shares slid in premarket trading after Bernstein initiated coverage with an underperform rating and a $115 price target, representing a 14% discount to Tuesday’s close.
2. Exploration Risk Concerns
The analyst highlighted conventional geothermal exploration challenges, citing uncertainties in resource development and project execution that could limit Ormat’s long-term growth prospects.
3. EGS Development Uncertainty
Investors are awaiting updates on enhanced geothermal system trials, with doubts about Ormat’s ability to compete against firms like Fervo that have refined EGS technology over nine years.
4. Energy Storage Contribution and Valuation
Energy storage accounted for roughly 10% of revenue despite stronger earnings, prompting concerns that stretched valuation levels leave limited room for upside.
