Morgan Stanley analyst Andrew Percoco maintained a Hold rating on Enphase Energy (ENPH – Research Report) today and set a price target of $67.00.
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Andrew Percoco’s rating is based on a mix of factors influencing Enphase Energy’s current market position. The company showed strong financial performance in the fourth quarter of 2024, with revenues aligning with predictions and an impressive gross margin. However, the first quarter of 2025 guidance, although it surpasses consensus expectations, includes a significant portion of revenue from safe-harboring practices, which essentially pulls demand forward and might not be sustainable long-term.
Moreover, the demand in Enphase’s end-markets appears unstable, with the U.S. market described as ‘stable’ but the European market showing mixed signals. The uncertainty surrounding interest rate cuts in the U.S. further complicates the outlook for residential solar growth. Therefore, despite the temporary revenue boost from safe-harboring, the overall market conditions and future demand uncertainty have led to a Hold rating for the stock.
In another report released on January 31, Guggenheim also upgraded the stock to a Hold with a $62.00 price target.