MAXN stock has target slashed at Roth

Following the launch of a patent infringement lawsuit, Roth MKM analyst Philip Shen has lowered his price target on Maxeon Solar Technologies (Maxeon Solar Technologies Stock Quote, Chart, News, Analysts, Financials NASDAQ:MAXN).

On March 25, MAXN announced it had launched a patent infringement suit against Canadian Solar.

“Maxeon has a strong heritage in developing solar cell technology, leading the development and commercialization of tunnel oxide passivated contacts,” said MAXN General Counsel Marc Robinson. “Years before the moniker ‘TOPCon’ started to be used in the industry to describe a tunnel oxide passivated contact-based solar cell, our scientists and engineers had developed several ways to implement TOPCon technology into both back contact and front contact solar cells. Maxeon has many patents related to TOPCon technology, with inventions drawn to fundamental TOPCon solar cell architectures dating back to the 2000s. This is Maxeon’s first action to enforce its valuable patent rights in the United States, and Maxeon will continue to vigorously enforce its patent rights in the United States and its other markets.”

The analyst summarized the development.

“Yesterday, MAXN issued a release stating it had initiated a TOPCon patent infringement lawsuit against CSIQ,” he noted. “This follows its announcement from November 2023 that it had initiated an investigation into TOPCon patent infringement in the United States (see here). We believe this lawsuit could cause a disruption in the industry as many may not be fully aware of the strength of MAXN’s TOPCon IP portfolio. We believe MAXN’s TOPCon patents predate any other TOPCon technology.”

In a research update to clients March 26, Shen maintained his “Neutral” rating on Maxeon, but cut his price target in half, from $6.00 to $3.00.

The analyst thinks MAXN will generate EBITDA of negative $60.7-million on revenue of $979.9-million in fiscal 2024.

“At this point, we only have the MAXN side of the story,” the analyst added. “We have reached out to CSIQ, but suspect we won’t hear back as this is an active lawsuit. We’ve contacted others in the industry as well and may have more thoughts later. Initiating a patent infringement lawsuit against one of the largest global module manufacturers puts the industry on notice that MAXN is willing to rigorously defend its extensive TOPCon patent portfolio, and we believe that MAXN’s TOPCon patents predate any other company’s TOPCon technology. Looking ahead, if MAXN’s claims against CSIQ prove to be accurate, we see potential for a settlement and/or licensing agreement between the two parties. This could also have a cascading effect on numerous module manufacturers looking to lock in licensing agreements with MAXN.”