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Investing.com -- JP Morgan downgraded Fluence Energy to “Neutral” from “Overweight” and halved its price target to $7 from $14 given the growing uncertainty around tariffs that could weigh on order activity and pressure the company’s ability to meet its fiscal 2025 guidance.

The firm warned that potential antidumping and countervailing duties, along with broader U.S.-China tariff risks, may stall near-term bookings in the energy storage sector, which remains heavily dependent on imported lithium-ion batteries.

JPMorgan (NYSE:JPM) estimates that recent tariff proposals could increase the cost of a four-hour turnkey system by more than 50%, making developers more cautious.

Analyst believe that customer uncertainty regarding tariffs is likely to result in subdued order activity near-term.

Given FLNC’s backlog covered just 85% of the mid-point of its 2025 guidance range, analyst see risk to its ability to deliver this ‘quick turn’ business during the year.

Fluence’s fiscal year ends in September, and with typical lead times of 5-6 months, JPMorgan sees limited room to close the guidance gap even if tariff decisions are resolved quickly.

The Department of Commerce’s ruling on energy storage-related CVD tariffs, expected in March, has yet to materialize, and ongoing budget constraints may further delay clarity, the note added.

Despite the downgrade, JPMorgan sees longer-term positives for Fluence, particularly as its U.S. cell manufacturing partnership with AESC ramps in fiscal 2026.

While still partially exposed to imported raw materials, JPMorgan believes this initiative positions the company more favorably than peers.

It also flagged Fluence’s new high-density solution, expected to begin shipping in FY26, as a potential international growth driver.

Still, with few near-term catalysts and downside risk to guidance, the bank cut its valuation multiple and lowered its target price.

We believe the revised multiple is warranted given expected downward revisions to FY25 guidance as well as competitive concerns in international markets, analysts say.

Shares of Fluence Energy trade at 15.2 times JPMorgan’s FY25 EBITDA estimate and 4.9 times FY26, compared to a peer average of around 12 times FY25 EBITDA.

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