Downgrade Casts Shadow on Solar Energy Stock

The analyst cited U.S. residential market weakness

Digital Content Manager
Sep 12, 2023 at 10:08 AM
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Truist Securities downgraded Enphase Energy Inc (NASDAQ:ENPH) stock to "hold" from "buy" this morning, and slashed its price target to $135 from $210. The analyst in question said shares could remain rangebound due to increased weakness for the U.S. residential market that may bleed into 2024. ENPH was last seen down 0.3% to trade at $121.80.

Analysts are still overwhelmingly bullish, with 23 of 35 carrying a "buy" or better rating, while the 12-month consensus target-price of $202.58 is a 68.8% premium to current levels. In other words, plenty of brokerages could change their minds going forward.

Enphase Energy stock is down 54.7% so far this year and has struggled with overhead pressure from the 20-day moving average since late July. Today's drop also placed ENPH closer to its Sept. 7, one-year low of $118.14.

A shift in the options pits could create additional headwinds, per the equity's Schaeffer's put/call open interest ratio (SOIR) of 0.72, which stands in the low 4tth percentile annual readings. This indicates short-term options traders have been more bullish than usual. 

Premiums are affordably priced at the moment, making it an excellent time to speculate with options. This is per the security's Schaeffer's Volatility Index (SVI) of 44% that sits higher than just 6% of readings from the last year, implying low volatility expectations. 

 
 

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