Why This Enphase Energy Analyst Says Q2 Beat-And-Raise Was Surprising

Enphase Energy Inc’s ENPH second-quarter beat and higher-than-expected guidance for the third quarter was driven by pricing power for its IQ8 microinverters in the U.S. and robust demand in the U.S. and Europe, according to Credit Suisse.

The Enphase Energy Analyst: Maheep Mandloi upgraded the rating for Enphase Energy from Neutral to Outperform, while raising the price target from $174 to $181.

The Enphase Energy Thesis: The company’s second-quarter beat was particularly surprising because the expectations were high going into the quarter, Mandloi said in the upgrade note.

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He added that the upgrade in rating reflected Enphase Energy’s “strong execution amid supply chain changes” and the company’s delivering on “IQ8 premium pricing/margins and operating leverage.”

The price target revision is based on “visibility in residential solar revenue growth (15% CAGR 2022-30), storage adoption (30% by 2030), and growth in C&I and EV charging markets,” Mandloi further wrote.

The analyst raised the earnings estimates for 2022, 2023, and 2024 from $3.49 per share to $3.87 per share, from $3.56 per share to $4.57 per share and from $4.24 per share to $5.57 per share, respectively.

ENPH Price Action: Shares of Enphase Energy were trading 6.42% higher at $271.12 midday Thursday.