Citi Maintains Sell Rating on Enphase (ENPH), Lowers Price Target to $43

On June 5, analysts at Citi reiterated a ‘Sell’ rating on Enphase Energy, Inc. (NASDAQ:ENPH) but cut their price target to $43 from $47. The price adjustments follow mounting concerns about the future of the US residential solar market.

Citi Maintains Sell Rating on Enphase, Lowers Price Target to $43

Wind turbines against a backdrop of the sky, signifying the power of renewable energy.

The analysts have raised concerns that the leading supplier of home energy solutions could come under pressure should there be changes in residential solar pricing. The Inflation Reduction Act is undergoing some changes. Proposed legislative changes include terminating 25D credits that could affect Enphase and other companies.

The Citi analysts have warned that if the bill were to pass in its current form, solar installations could decline. The declines could hit highs of 75%, leading to business closures and slower innovation due to a reduced research and development budget. Assuming no changes are made to avert the slowdown, Citi analysts warn that Enphase Energy’s EBITDA could decline by up to 60% next year. Likewise, the stock might end up trading in the high teens.

Enphase Energy is an energy technology company specializing in designing, developing, manufacturing, and selling home energy solutions. It offers an intelligent platform that connects solar generation, energy storage, and management.

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Disclosure: None.