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Investing.com -- Enphase Energy (NASDAQ:ENPH) stock fell 4% after Goldman Sachs analyst Brian Lee downgraded the solar energy technology company from Buy to Sell, slashing his price target to $32.00 from $77.00.
The significant downgrade represents a potential 25% downside from Tuesday’s closing price of $40.94. Lee cited several factors behind his bearish outlook, including recent tariffs, particularly in China, which have forced Enphase to adjust its supply chain and lower near-term margin expectations.
Lee’s previous Buy recommendation was based on expectations that Enphase would benefit from an improving U.S. residential solar market after normalizing its inventory channel. He had also anticipated that the company’s newest battery product would help capture market share in a growing segment, while the launch of the IQ9 microinverter was expected to improve cost structure and facilitate expansion into the commercial segment.
However, recent developments have changed his perspective. Beyond supply chain challenges, Lee expressed concerns about Enphase’s longer-term prospects, noting that "following the recent resi solar tax changes, we believe the company’s outlook beyond 2027 is likely to remain under pressure."
The downgrade comes as Enphase navigates a challenging period in the solar energy sector, with regulatory changes and global trade tensions creating headwinds for manufacturers.
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