Enphase Energy cut at Wolfe on U.S. residential market doldrums
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Enphase Energy (NASDAQ:ENPH) -4.8% in Thursday's trading as Wolfe Research downgraded the stock to Peer Perform from Outperform with a $200-$215 fair value, saying the rates-driven downturn in the U.S. residential market is tracking worse than expected, and hyper growth in Europe may slow.
Enphase's (ENPH) growth is being challenged by higher rates which especially hurts the economics of loan products, to which the company is over-indexed, and headwinds have been compounded by the double whammy of NEM 3.0 in California, where customer savings are now marginal without the inclusion of an expensive battery, according to Wolfe's Steve Fleishman.
The company's international sales doubled in 2021 and 2022, and Fleishman expects near-100% growth again in 2023 due to aggressive expansion efforts, but the analyst believes the European market is getting more competitive and tailwinds from recent elevated power prices may dissipate.
Enphase (ENPH) "remains a high quality company and valuation is less extended, but we need to see better visibility on [a] U.S. recovery," the analyst wrote.
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