Enphase cut at BMO as finding bottom in demand 'more elusive than expected'
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Enphase Energy (NASDAQ:ENPH) +2.9% in Monday's trading even after BMO Capital downgraded the stock to Market Perform from Outperform with a $148 price target, cut from $175 but still well above the current ~$127.
The trough in U.S. residential solar demand is deeper than expected and the timing of a recovery is uncertain, BMO's Ameet Thakkar said.
The analyst's anticipated trajectory for Enphase (ENPH) to resume sequential revenue growth by around Q2 2024 is unchanged, but based on its updated U.S. inverter demand assumptions, he now forecasts FY 2024 revenues will rise by only a modest 2% Y/Y, with demand unlikely to return to 2022 levels until 2025-26.
Thakkar said Enphase (ENPH) shares have outperformed nearly every significant solar equipment supplier by a wide margin since the Q2 reporting season, which makes it harder to continue to justify the magnitude of the company's stock valuation premium.

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