Enphase Stock Sinks as Slower Transition Leads to Sharp Price Cut

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Shares of solar specialist

Enphase Energy

were tumbling Wednesday after a sharp price cut and downgrade by analysts at BofA Global Research.

BofA Global Research lowered its rating on the stock to Neutral from Buy and cut the price target to $187 a share from $297. The analysts said Enphase’s recent analyst day highlighted the company’s “efforts to diversify beyond its core microinverter sales but affirmed our concerns of a slower transition than perceived.”

The stock fell 9.7% to $161.06 on Wednesday.

BofA Global Research’s Julien Dumoulin-Smith said in a note that the price target was being reduced on lowered fiscal 2022 and fiscal 2023 revenue estimates.

Dumoulin-Smith said Enphase’s 2022 is a “critical transition on lofty and super-premium ambitions.”

The analyst said 2022 “is a transition year in our view as Resi storage efforts principally and mgmt entrenches itself with long-tail installers to ensure a pathway to sustained and potentially ever higher margins.”

“Bottom line, expect pivot but [near-term] Ebitda growth is slower than recent trend,” wrote in the note.

BofA Global Research said it was reducing its estimates by 12% for 2023 Ebitda, “while still being 31% above the Street. “

Enphase recently acquired ClipperCreek, an electric vehicle charging solutions company. It is expected to sell roughly 20,000 chargers in 2021, reflecting $20 million in revenue. This suggests “some of the growth may be back-end loaded, which bring sobriety to our 2022/23 projections,” he added.

Write to Karishma Vanjani at [email protected]

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