Guggenheim analysts downgraded SolarEdge Technologies and First Solar, due to rising input costs. Shoals Technologies (SHLS), Array Technologies (ARRY) were also downgraded by Guggenheim. At their current prices, these stocks are overvalued. We recommend that you avoid them. Read on.Even though governments worldwide have been taking steps to transition their countries to a renewable energy-driven future, rising input costs and supply chain constraints are affecting the renewable energy sector’s growth. Jerome Powell, the chair of Federal Reserve, stated that global supply chain problems could continue through 2022.

Analysts at Guggenheim Partners recently downgraded four solar stocks from “Buy” to “Neutral,” primarily on concerns over rising input costs, namely steel, aluminum, labor, and panels. Furthermore, Kelsey Goss, research analyst at Wood Mackenzie, said, “There’s lots of uncertainty in the industry because they do not know how strict the WRO enforcement will be, or currently is.”

The solar stocks downgraded by Guggenheim analysts—SolarEdge Technologies, Inc. (SEDG), First Solar, Inc. (FSLR), Shoals Technologies Group, Inc. (SHLS), and Array Technologies, Inc. (ARRY)—do look significantly overvalued at their current price levels. We recommend that you avoid these stocks.

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