Enphase Energy tumbles to 52-week low after 'meaningfully worse' guidance
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Enphase Energy (NASDAQ:ENPH) -10.2% in early trading Friday after missing Q2 revenue estimates and issuing weak guidance for revenues in Q3, prompting analyst downgrades from Deutsche Bank and Wells Fargo.
Deutsche Bank downgraded Enphase (ENPH) to Hold from Buy with a $165 price target, lowered from $200, saying she is now more cautious on the company's growth profile over the next 6-12 months.
"There is a growing negative backdrop especially when looking at the U.S. residential market and relatively high inventory in the channel, which ENPH is now trying to correct by under-shipping volumes into 3Q," DB analyst Corrine Blanchard wrote, adding demand softness in key markets such as California coupled with seasonality in Europe also will add pressure to Enphase's (ENPH) full-year revenues, now guided down to $550M-$600M.
Wells Fargo cut the stock to Equal Weight from Overweight with a $171 PT, down from $230, as the combination of NEM 3.0, high interest rates and low natural gas prices have accelerated the slowdown in the U.S. residential solar market.
The bank now sees U.S. microinverter shipments falling 25% Y/Y in Q4 and 28% Y/Y in Q1 2024, compared to its previously forecast declines of 18% and 8%, respectively.
Despite the "meaningfully worse than expected guidance," Roth MKM maintained its Buy rating because of Enphase's (ENPH) "technology leadership" but cut its stock price target to $185 from $250 previously.
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