Enphase Energy Stock Declines After Jefferies Cuts Price Target Amid Demand Concerns: Retail Remains Bearish

The brokerage highlighted that the outlook for residential demand for Enphase’s products remains challenged due to worsening sentiment with respect to the Inflation Reduction Act.

Enphase Energy Inc. (ENPH) received a price target at Jefferies over concerns of a weakening demand scenario in the U.S. Shares of Enphase Energy fell over 5.6% in Wednesday’s after-market hours.

According to The Fly, Jefferies cut its price target for Enphase to $44 from $54, a downside of nearly 30% from Wednesday’s close, while retaining an ‘Underperform’ rating. 

The brokerage highlighted that the outlook for residential demand for Enphase’s products remains challenged due to worsening sentiment with respect to the Inflation Reduction Act.

As a result, Jefferies said the visibility with respect to Enphase’s long-term growth is limited, resulting in the price target cut.

Jefferies’ cut follows similar actions by a slew of other brokerages. Earlier in March, analysts at Wells Fargo, Barclays, RBC Capital, and Bank of America (BofA) Securities lowered their price targets for Enphase Energy.

Challenging market conditions in Europe, despite relatively stable demand in California and other markets in the U.S., led to the price target cuts, with BofA stating that the “underlying picture” remains “murky.”

Retail sentiment on Stocktwits around Enphase remained in the ‘bearish’ (39/100) territory.

One user thinks the stock could open 10% to 12% lower on Thursday.

Data from Koyfin shows the average price target for Enphase is $79.49, implying an upside of 27% from Thursday’s closing price.

Of the 40 brokerage calls, 17 had a ‘Strong Buy’ or ‘Buy’ recommendation, 20 suggested ‘Hold,’ while three had a ‘Sell’ or ‘Strong Sell’ rating.

Enphase’s stock is down 9% year-to-date.

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