Analyst Reverses Decade-Long Solar Stock View Amid European Hopes

Enphase Energy Inc ENPH shares jumped in early trading on Monday.

The stock has lost 31% year to date, having erased all its “peer-leading gain from 2022,” and is no longer “priced for perfection,” according to Raymond James.

The Energy Analyst: Pavel Molchanov upgraded the rating for Enphase Energy from Market Perform to Outperform, while setting a price target of $225.

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The Energy Thesis: Investor concerns around California’s residential PV demand due to the net metering reform, which took effect in mid-April last year, appear to be overblown, Molchanov said in the upgrade note.

“California was 20% of Enphase’s salex mix in 2022, well below the state’s one-third proportion of the U.S. residential PV market,” the analyst wrote. The company has done “a phenomenal job of pushing into Europe, which lacks the U.S. market’s regulatory pitfalls, whether net metering or protectionism,” he added.

“Europe emerged as Enphase’s leading growth driver in 2022, and we expect even more of that in the years ahead,” Molchanov further stated.

ENPH Price Action: Shares of Enphase Energy had risen by 5.22% to $193.23 at the time of publication Monday.