Analysts Positive On Enphase Energy Shares

Enphase Energy (NASDAQ: ENPH) shares rose on Monday, closing the session at +0.5% after the stock was upgraded to Outperform from Market Perform by Northland analyst Gus Richard.

The analyst assigned a $365 price target on Enphase shares after the California Public Utility Commission (CPUC) passed NEMS 3.0 last week.NEM 3.0 is a new version of the net energy metering policy, which boosts incentives for storage and reduces them for residential solar.

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The analyst calculates that around 8% to 12% of Enphase’s revenue is from California and said that Hawaii and California have the most significant percentage of renewable energy. In addition, Richard believes that electrification pushes natural gas prices higher, which improves solar and storage adoption and then drives the electrification of appliances and the demand for more electricity in what the analyst says is a “virtuous solar cycle.”

The positive view from Northland is in contrast to Susquehanna, who downgraded Enphase Energy to Neutral from Positive last Thursday, raising the price target on the stock to $365 from $310 per share,

Susquehanna analyst Biju Perincheril said in a note to clients that he downgraded the stock and altered the price target after updating estimates for the firm’s residential solar coverage.

Despite “modestly higher” installation projections in the US and strong international growth potential, said Enphase Energy has a “relatively rich valuation.” He added that although Enphase’s execution “has been nearly flawless,” the shares are “now priced for near perfection.”

Enphase Energy shares are up over 64% this year, despite the current challenging macroeconomic conditions.

Analyst ratings firm TipRanks shows that out of 16 analysts covering Enphase, 13 have a Buy rating on the stock, with three at Hold. The average price target of $324.88 represents a potential 6.5% upside in the stock.