Fluence Energy (FLNC.US) surged 13.24% in Wednesday's trading, marking a two-day gain of up to 19% following its Q4 earnings release. While the quarterly results were mixed, the company projected a 50% revenue growth for fiscal 2026.

Jefferies analyst Julien Dumoulin-Smith upgraded Fluence from "Underperform" to "Hold," raising the price target from $11 to $16. He noted that the energy storage technology firm's margins are "improving," with a recovery "finally visible."

Dumoulin-Smith acknowledged fiscal 2025 as a challenging year for Fluence but highlighted that fiscal 2026 appears "increasingly attractive" as the company nears resolution of AESC issues and shows early signs of recovery in the U.S. market.

Despite a year-over-year decline of one-third in full-year new orders, Q4 data was encouraging: new orders grew 21% YoY, marking a return to growth after three consecutive quarterly declines. Gross margins exceeded expectations, and the preliminary fiscal 2026 guidance midpoint of 12% also surpassed Wall Street's consensus estimate of 10.9%.

"While more progress is needed, we believe Fluence's core U.S. market recovery is on track, with macro headwinds largely in the rearview," Dumoulin-Smith wrote. "Ultimately, we upgrade our rating based on sustained improvement in end-market signals."