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Investing.com - Jefferies lowered its price target on Enphase Energy (NASDAQ:ENPH) to $35.00 from $37.00 on Thursday, while maintaining an Underperform rating on the solar energy technology company. The stock, which has declined nearly 60% over the past year, currently trades at $42.85, according to InvestingPro data.
The price target reduction reflects Jefferies’ concerns about how quickly Enphase can adapt to the approaching expiration of the 25D tax credit, which has been supporting residential solar installations.
Jefferies anticipates a demand pull-forward in the second half of 2025, followed by a sharp decline in the first quarter of 2026 as the tax credit expires.
The firm noted that Enphase’s launch of its IQ10C product aims to narrow the storage pricing gap, while the IQ9 may support commercial and industrial market expansion.
Jefferies emphasized that Enphase now faces a critical juncture where it must either implement meaningful pricing actions to offset the loss of the 25D tax credit or demonstrate tangible progress in penetrating the third-party ownership market.
In other recent news, Enphase Energy has faced a series of significant developments. Goldman Sachs downgraded Enphase Energy from Buy to Sell, with analyst Brian Lee citing challenges such as recent tariffs and regulatory changes, which could impact the company’s long-term prospects. Lee reduced the price target for the company to $32.00, highlighting potential supply chain adjustments and margin pressures. Additionally, TD Cowen also downgraded Enphase Energy to Hold from Buy, lowering its price target to $45.00, due to concerns over the expiration of the 25D tax credit at the end of 2025, which might affect residential solar demand.
In the competitive California solar market, Enphase Energy’s market share in the inverter segment saw a slight decline, with Tesla (NASDAQ:TSLA) gaining ground. Despite this, Enphase is rolling out its fourth-generation battery, IQ 10C, with a competitive installation cost, which could enhance its position in the battery segment. The company also announced the commencement of production shipments of its IQ EV Charger 2 in Australia and New Zealand, a product designed to integrate with Enphase solar and battery systems.
Furthermore, Enphase Energy’s Board of Directors has decided to retain T.J. Rodgers as a board member, despite him receiving less than 50% of the votes at the recent stockholder meeting. The board emphasized Rodgers’ expertise in semiconductors and power electronics as vital to Enphase’s innovation efforts. These developments reflect a period of strategic adjustments and challenges for Enphase Energy in the evolving solar energy landscape.
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