Oppenheimer maintains Array Technologies rating on APA Solar acquisition

Array Technologies (NASDAQ:ARRY), currently trading at $7.97 with a market capitalization of $1.21 billion, is acquiring racking and pilings company APA Solar at 7.6 times trailing twelve-month EBITDA excluding 45X credits, according to an Oppenheimer research note. The firm reiterated its Outperform rating and $13.00 price target on Array stock following the announcement. According to InvestingPro analysis, the stock appears slightly undervalued based on its Fair Value model.

The acquisition will expand Array's geographic capabilities, particularly in colder and rockier regions where APA Solar has established expertise. APA Solar's pilings technology represents a key area of innovation in the solar sector, potentially optimizing labor costs, reducing infrastructure materials, and enhancing system stability in challenging weather and soil conditions. This strategic move comes as Array shows strong momentum, with InvestingPro data revealing a 38.1% price return over the past six months.

The deal will also bring fixed tilt solutions to Array's product portfolio, making the company a comprehensive provider of ground mount infrastructure solutions for solar developers. Array expects to realize approximately $31 million in tax savings from the transaction, with additional potential for supply chain and sales synergies.

Oppenheimer noted that pilings have been a significant component of safe harbor spending in the solar industry. The firm anticipates modest synergies that could increase if the industry continues to consolidate around the top five solution providers.

The acquisition comes as investors seek exposure to utility-scale solar activity, which is expected to accelerate following Monday's Senate budget announcement. Oppenheimer projected that Array shares would remain flat to positive on the acquisition news.

In other recent news, Array Technologies announced a definitive agreement to acquire APA Solar, LLC for approximately $179 million. This acquisition is expected to expand Array's market by nearly 40% and is projected to be accretive to the company's adjusted earnings per share in the first year. APA Solar generated about $129 million in revenue in 2024, and the transaction is anticipated to close in the third quarter of 2025, pending regulatory approvals. Additionally, Array Technologies held its Annual Meeting of Stockholders, where Jayanthi Iyengar and Tracy Jokinen were elected to the board, and Deloitte & Touche LLP was ratified as the independent accounting firm for 2025.

In analyst updates, Jefferies raised Array Technologies' stock target from $7.00 to $10.00, maintaining a Buy rating, and expressed optimism about the company's prospects in the solar industry. Similarly, Goldman Sachs increased its price target to $11.00 from $9.00, also reiterating a Buy rating, citing potential policy relief as a positive factor. However, BMO Capital Markets maintained a Market Perform rating with a $7.00 price target, noting concerns about project delays due to tariff policy uncertainties. Despite these challenges, analysts have highlighted the company's strong U.S. order book and improved Average Selling Prices due to rising steel prices.

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