FLNC Stock Has Dropped 24% This Year — And More Pain May Be Coming Due To Trump Administration’s Tax Policies

• UBS stated in its note that the competitive intensity in the battery energy storage systems space is increasing.
• The firm cited the Trump administration’s tax policy, which incentivizes auto manufacturers to shift from battery production for electric vehicles to utility-scale BESS.
• UBS expects an oversupply of BESS starting in 2027, which will push costs down and increase pressure on Fluence Energy’s margins.

Shares of Fluence Energy Inc. (FLNC) could be in for further decline after falling more than 24% year to date, with UBS analysts flagging concerns about battery oversupply.

According to TheFly, UBS downgraded Fluence Energy to ‘Sell’ from ‘Neutral’ and lowered its price target by 64% to $8 from $22. The firm’s new price target implies a 43% downside from Fluence Energy’s Thursday closing price.

Fluence Energy shares were down more than 9% in Friday’s pre-market trade.

UBS Highlights Increasing Competitive Intensity

UBS stated in its note that competitive intensity in the battery energy storage systems (BESS) space is increasing, citing the Trump administration’s tax policy that incentivizes auto manufacturers to shift production from batteries for electric vehicles to utility-scale BESS.

The firm expects an oversupply of BESS starting in 2027, which will push costs down and thereby increase pressure on Fluence’s margins. UBS added that the market currently “significantly underappreciates” the manufacturing capacity additions of BESS due to U.S. tax policies for the sector.

Analysts at Goldman Sachs also trimmed their price target for Fluence Energy to $20 from $28 while keeping a ‘Buy’ rating on the stock. The firm stated that it expects the first quarter (Q1) to be a “noisy” one for the company.

Barclays analysts noted that while Fluence Energy has resolved the tax credit risk after its supplier retained compliance with the Foreign Entity of Concern rules, the Middle East shipping disruptions due to the Iran war could result in Fluence missing second-quarter (Q2) sales estimates. Barclays lowered its price target for Fluence Energy to $16 from $20, while maintaining an ‘Equal Weight’ rating.

Fluence Energy reaffirmed earlier this month the continued availability of its U.S.-manufactured products that qualify for tax incentives under the One Big Beautiful Bill Act.

How Did Retail Traders React?

Retail sentiment on Stocktwits around Fluence Energy trended in the ‘bullish’ territory, with message volumes at ‘high’ levels at the time of writing.

FLNC stock is down 24% year-to-date, but up 312% over the past 12 months. The iShares Russell 2000 ETF (IWM) is up 46% over the past 12 months, while the Vanguard Small-Cap Growth Index Fund ETF (VBK) is up 40%.

Also See: ENVB Stock Is On Track For Its Worst Decline In Over 10 Weeks On Discounted Offering – But Retail Remains Upbeat

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