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Investing.com - Citi has reduced its price target on Enphase Energy (NASDAQ:ENPH) to $30.00 from $43.00 while maintaining a Sell rating on the stock. The solar technology company, currently trading at $39.39, has seen its shares decline by 65% over the past year, with InvestingPro data showing significant valuation multiples at 35x earnings.
The firm cited concerns about Enphase’s revenue outlook, noting that despite the company holding up better than anticipated, it faces challenges including a lack of recovery in European markets and the imminent end to 25D solar incentives. Recent data shows a 22% year-over-year revenue decline, though the company maintains strong liquidity with current assets exceeding short-term obligations.
Citi’s analyst has maintained below-consensus revenue estimates for Enphase for five consecutive quarters, during which time market consensus estimates have consistently decreased.
The firm now projects Enphase’s fiscal year 2026 revenue to be more than 20% below current street expectations, highlighting a significant gap between its outlook and broader market forecasts.
While Citi acknowledged that revenue risks for Enphase are now "better defined and understood," it warned that margin risk "is yet to be clarified," factors that contributed to its decision to maintain a Sell rating while lowering the price target.
In other recent news, Enphase Energy has started shipping its IQ Battery 5P with increased domestic content from U.S. manufacturing facilities. This move aligns with the new federal requirements mandating a certain percentage of U.S.-sourced materials for solar and battery products to qualify for tax incentives. Enphase’s new battery units are designed to meet both current and future domestic content thresholds, supporting American jobs and manufacturing. Meanwhile, RBC Capital Markets raised its price target for Enphase Energy, despite highlighting market share challenges due to the expiration of 25D tax credits. RBC’s analysis suggests a potential shift in customer preference toward third-party ownership systems, where Enphase holds a smaller market share. JPMorgan has downgraded Enphase Energy from Overweight to Neutral, citing concerns over solar policy changes and their impact on Enphase’s revenue. The investment bank noted a significant portion of Enphase’s U.S. revenue is tied to lease and PPA markets. Additionally, Jefferies lowered its price target for Enphase Energy, expressing concerns about the company’s adaptation to the impending expiration of the 25D tax credit. Lastly, Enphase has expanded shipments of its IQ EV Charger 2 to several European markets, enhancing its presence in the region.
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