Enphase Energy cut at Piper Sandler on residential demand uncertainty
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Enphase Energy (NASDAQ:ENPH) -5.4% in Wednesday's trading after Piper Sandler downgraded shares to Neutral from Overweight with a $255 price target, saying demand for residential solar loans has fallen more than expected.
As part of a preliminary rating on Goodleap's new ADS, Kroll Bond Rating Agency last week published a chart indicating a sharp decline in December 2022 loan originations from the August peak, with solar originations apparently ~10% below December 2021; given Goodleap's ~30% market share, Piper Sandler analyst Kashy Harrison believes other loan sellers may be experiencing similar trends.
"While we expected a deceleration in Cal'23 U.S. resi growth partially due to higher financing costs adversely impacting regions with marginal economics, we did not anticipate this degree of demand weakness," Harrison wrote in her downgrade.
The analyst still views Enphase (ENPH) as a company with solid products, strong management, best-in-class operations and an attractive market position, but U.S. residential demand uncertainty is "too elevated."
Enphase Energy (ENPH) shares have lost 18% so far this year but gained 69% during the past year.